State Bill 729 is the Coal Ash Management Act of 2014, which calls for Duke Energy to remove or close all of its 33 coal ash dumps ("ponds") by 2029. The bill, currently making its way through the State Senate, also requires several "high risk" sites (including the local Sutton Lake site and the Dan River site) to be removed within 5 years. Intermediate-risk sites will have to be removed within 10 years and low-risk sites will have to be removed or "closed" within 15 years. "Closing" a coal ash dump means that the site is capped and left in place.
Duke Energy, the largest power company in the U.S, has suggested that they need 30 years to close or remove all the sites and that this will be a very expensive venture, given that there is roughly 100 million tons of coal ash to be dealt with across the state. The bill prohibits the costs from being passed to taxpayers, but leaves room for Duke to increase utility rates to offset the costs. I think we can all expect to pay more for electricity soon.
Environmental groups are saying that this is a step in the right direction, but it could still allow for pollution of ground water, given that all of Duke's14 power plants and all 33 coal ash ponds are located near rivers or lakes that supply drinking water to municipalities. The bill allows some coal ash to be stored in unlined landfills or stored on site.
Coal ash contains numerous toxins, including arsenic, selenium, chromium, lead and mercury. Selenium pollution from coal ash in Sutton Lake has been linked to fish deformities and premature mortality according to a study by Wake Forest University Professor Dennis Lemly. More on that story here. Note the economic values attributed to the fish loss, and the use of "replacement cost" values as an indicator of opportunity cost.
As many of your are aware, all of this action was prompted by a spill of 39,000 tons of coal ash and 27 millions of gallons of coal ash waste water into the Dan River in Eden NC in February of this year.
This could all get much more complicated in the coming months, because the EPA will issue new national coal ash standards in December 2014.
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Water is a very important resource that if contaminated can be very difficult and expensive to clean. Opportunity cost can be calculated by taking the numbers and prices of fish that on average would normally be caught and subtracting the number of good fish caught and sold this year to find the number lost to deformities and premature death. Replacement cost on groundwater and surface water is another issue because even though water must go through municipal water treatment facilities, not all of the harmful toxins and chemicals are able to be treated and most are carcinogenic and can cost serious short and long term health problems.
As a consumer I am not looking forward to an increase in energy costs but I can objectively see the necessity of coal ash pollution reduction. The by not allowing the costs associated with shutting down the coal ash dumps to be subsidized by taxpayers, the costs will be internalized between Duke Energy and the consumers. This should allow for the most efficient reduction of pollution, even with the higher energy costs, because Duke Energy will seek to lower its production costs under the new legislation and consumers will react to the higher prices by reducing energy consumption. This will result in higher social net benefits, provided the costs of shutting down the coal ash dumps is less than or equal to the value of the pollution reduction.
In response to Preston, I agree that the water issue is one of the largest issues to address. Water is such a vital part of North Carolina, especially the Sutton Lake site which is close to Wilmington. The coal ash must be taken care of properly or there are going to be serious repercussions for the city of Wilmington or those living in the Cape Fear River areas.
I'm glad that they are cleaning up and in doing so creating a healthier environment in the process. I have read a lot of nasty articles about Duke Energy but nothing ever seems to get done. How can it be that the bill doesn't allow them to pass costs on to the customers, yet they can offset them by raising their prices? That seems like the same thing to me
I recently heard a presentation from Kemp Burdette from Cape Fear River Watch and he was telling us about coal ash. He recently said that there is no regulation on coal ash and that in the government they are still trying to determine if coal ash is considered a hazardous or nonhazardous material (which in my opinion if coal ash is made up of a bunch of chemicals that in these levels are very harmful even toxic to the environment) it should automatically be classified as hazardous. The problem with this is that there is different regulation based on the classification of these materials. It is good to hear that this issue of coal ash is being addressed in the government. It is difficult to believe that these areas will be cleaned up because progress will not be seen in a long time because it is a 30 year project but I think that it is a step in the right direction. On an economic perspective I think that increasing energy costs, while its unfortunate to have to pay more, is a good idea because how else are we going to make people aware.
This sounds much like the contamination problem Camp Lejeune had back in the 70's and 80's and is just now being resolved. We may see much of the same with this, but hopefully resolved in a quicker fashion due to national attention. Much of the harmful effects may not be realized at the moment which is quite scary. I believe that increased costs to aid in shutting down these sites is a step in the right direction. As a consumer I am willing to pay a high price to avoid water that can potentially be toxic to myself and surrounding ecosystem. When December comes around and the new regulations are set I believe we can make fair judgments on how much of an increase in consumer costs we will see. It will take many years, however, to realize the full costs of ash dumping, and many years to see the true benefits of our current actions to clean it up.
We actually discussed this event in my ecology course yesterday but we didn't discuss the economic costs of this bill, only the environmental costs of having coal ash ponds.
While these ponds contain many harmful chemicals, the majority are only harmful when in large doses, or when they are being stored in one large area. These coal ash ponds actually contain many micro and macronutrients that are helpful to our soil. Rather than Duke Energy simply burying the ponds, distributing small amounts of it to be mixed into the soil in abandoned, or unused fields would actually help replenish some necessary nutrients.
15 years is a long time, but I guess it's better than never. I am curious to know how many sites are "high-risk" and how many are "intermediate-risk"? How much damage could 5 more years of "high risk" sites cause?
I find articles like this scary, especially when I read about the deformities. I always wonder what unforeseen damages this will inflict on us in the future. Fish are smaller and live in the water their entire lives and are therefore affected more by this runoff, but this runoff could have major implications for our health as well. Not just for eating the fish but also from drinking the water and being exposed to these chemicals in other ways. Although I am glad that Duke Energy is now being forced to clean up their mess I wonder in what effective way they are going to get rid of the coal ash that won't harm the environment elsewhere.
I agree with Grant that 15 years is a long time. I understand that removing site is not an easy task, but a “high risk” site remaining for five more years could cause a lot of damage to the environment. It is good that they are being removed, even if it takes a few years, because the damage they do to the water surrounding them can affect both humans and the organisms that live in the water. If it is causing problems like deformities and early death for fish and it is seeping into our groundwater supply, what affect can it be having on us?
Now that coal ash pollution is being addressed, as a consumer I would rather face an increase in energy costs than have no regulation on coal ash where we currently were coming from. Shutting down the coal ash ponds necessary in protecting the natural resources and water supply of North Carolina. Pollution from selenium has resulted in premature mortality and there is high replacement cost value for lost fish stock, and closing the ponds will reduce the pollution from contaminants over time. Although it may affect the area for years to come, it will reduce from the current levels that may have negative health consequences. It is a necessary step, and although it’ll take another 15 years, will be a gradual improvement to the opportunity cost of clean air, water, health concerns and quality of life.
While I agree that 15 years is entirely too long for all sites to be closed, I have to commend the bill for requiring the high-risk sites to cease activity the soonest. Much like a person in debt should pay off credit cards collecting the highest interest rates first, the sites that are most damaging to the environment and, in turn, our livelihood should be closed first.
Internalizing the costs for these changes to avoid increased N.C. taxes really won't make much of a difference on N.C. citizens because Duke Energy is a huge monopoly in this state. Either way, we will all pay for their mistakes. Also, I wonder what they will do with their waste now that these dumps are being shut down. Are we simply going to be introduced to a new pollution problem?
Fifteen years is too long but I agree with Chatoney that they required to halt the high risk sites. The process will take time from the highest to the lowest and it will be better to take their time because they will have to be very cautious in the removal. If the removal process was sped up then there would be a higher risk of pollution of coal ash, and will cause the removal process to slow down even further than 15 years.
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