Coal Ash Rule Update: EPA's New Deadlines for Impoundment Closure: A 'Holistic Approach' or a 'Grab Bag of Loopholes?'

On November 4, 2019, US Environmental Protection Agency (EPA) released its long-awaited response to the DC Circuit's two decisions remanding portions of the Coal Ash Rule. United Solid Waste Activities Group v. Environmental Protection Agency (D.C. Cir. 2018) (the USWAG case) and Waterkeeper Alliance, Inc., et al. v. EPA (D.C. Cir. 2018) (the Waterkeeper case). EPA called its proposed new rulemaking a "Holistic Approach to Closure." By contrast, an attorney for Earthjustice called it a "grab bag of loopholes." Either way, the new proposed rule is not likely to do a whole lot to appease the critics of EPA's handling of the Coal Ash Rule or its approach to environmental regulation generally.

Background

As discussed in a previous alert, the Coal Ash Rule was promulgated by EPA in 2015. It was designed to "regulate the disposal of coal combustion residuals (CCR) . . . as solid waste under subtitle D" of the Resource Conservation and Recovery Act (RCRA). The Coal Ash Rule establishes "national minimum criteria for existing and new CCR landfills . . . and surface impoundments . . . consisting of location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements and post-closure care, and recordkeeping, notification and internet posting requirements." 80 Fed. Reg. 21,302. The Rule is designed to be "self-implementing," meaning that "facilities are directly responsible for ensuring that their operations comply with the Rule's requirements." Id. At 21,311. 

In the USWAG case, the DC Circuit held that certain portions of the Coal Ash Rule were inconsistent with Section 4004(a) of the RCRA. Specifically, the DC Circuit held that unlined and clay-lined CCR surface impoundments pose a "reasonable probability of adverse effects on health or the environment" and therefore constitute prohibited "open dumps" under subtitle D of RCRA. The USWAG case vacated 40 CFR § 257.101 (which allowed unlined CCR impoundments to operate until a leak was detected) and 40 CFR § 257.71(a)(1)(ii) (which defined clay lined impoundments as "lined") and remanded those portions of the Coal Ash Rule to EPA for further rulemaking consistent with the Court's opinion. 

In the Waterkeeper case, the plaintiff challenged EPA's deadline of October 31, 2020 (set forth in 40 CFR § 257.101(a) and (b)(1)(i)) for surface impoundments which failed the Coal Ash Rule's location restrictions to retrofit or close. The DC Circuit did not strike down the October 31, 2020 date because EPA agreed to reconsider the deadline in light of the DC Circuit's decision in the USWAG case. 

EPA's Proposed Rule Revisions 

EPA's November 4, 2019 proposed rule revision changes the classification of clay-lined impoundments from "lined" to "unlined" under 40 CFR § 257.71(a)(1)(i). The proposed revision also eliminates the regulation which allowed unlined impoundments to continue to operate until they leak. 40 CFR § 257.101(a). As a result of these rule changes, unlined and clay lined CCR surface impoundments are now required to close under the remaining, non-vacated language of 40 CFR § 257.101(a)(1). Faced with the DC Circuit's unambiguous mandate in the USWAG case, EPA arguably had no choice but to require unlined and clay lined surface impoundments to retrofit or close. 

EPA's response to the remand in the Waterkeeper case was more complex. The plaintiffs in the Waterkeeper case had objected to EPA's date of October 31, 2020 for utilities to cease placement of CCR into surface impoundments that fail the Rule's various location restrictions (e.g., impoundments that are in contact within the underlying aquifer). EPA responded by moving the date up several months to August 31, 2020. EPA reasoned that utilities which operated surface impoundments would have understood from the USWAG decision which impoundments would be subject to closure. Using 22.5 months as the fastest "technically feasible timeframe needed to construct alternate capacity and for CCR surface impoundments to cease receipt of waste," EPA added that 22.5 months to the date of the DC Circuit's mandate in the USWAG case (October 15, 2018) to arrive at the August 31, 2020 date.

At the same time, EPA stated that what it intended was for impoundments that failed the location restrictions to stop receiving waste and to begin closure "as soon as technically feasible." EPA stated that it could not "impose more protective measures than can be technically feasibly implemented as the law cannot compel the impossible." EPA then provided an extensive analysis of technically feasible approaches utilities might take to cease receipt of waste and initiate closure. Because a utility cannot close an impoundment until the impoundment stops receiving waste, and because alternative disposal capacity is needed before an impoundment can stop receiving waste, EPA devoted considerable attention to methods for developing alternative capacity and the timeframes needed to do so:

• Conversion to dry handling: 36 months
• Build a non-CCR wastewater basin: 21 months
• Build a wastewater treatment facility: 16-21 months
• Build a new CCR surface impoundment: 27 months
• Retrofit a CCR surface impoundment: 31.5 months
• Build a multiple technology system: 21 to 36 months

EPA called on utilities to use the comment period for the proposed rulemaking to provide feedback on whether EPA's proposed timeframes are, in fact, technically feasible. 

But in a clear signal that EPA believes many utilities will not find it technically feasible to meet the August 31, 2020 deadline, EPA is also proposing several alternatives for utilities to obtain additional time to begin to retrofit or close. 

Under new Section 103(e), an owner or operator may obtain an automatic three-month extension to begin closure (up to November 30, 2020) if it certifies that its CCR and non-CCR waste streams must continue to be managed in its existing CCR impoundment to allow sufficient time to complete the measures necessary to obtain alternative disposal capacity. The extension lasts until the alternative capacity is available or November 30, 2020, whichever is sooner. The three-month extension is self-implementing. The owner or operator must document its efforts to develop alternative capacity in its operating record as directed in new Section 103(e), but no approval from EPA is necessary to secure the extension. 

New Section 103(f)(1) provides for longer extensions which may be granted on a site-by-site basis. These extensions are not self-implementing, but rather require the owner or operator to submit extensive documentation to EPA or the Participating State Director demonstrating that it is "infeasible" to develop alternative disposal capacity by the new August 31, 2020 deadline. The owner or operator must post the request and supporting documents on its publicly-available website and in addition must post semi-annual progress reports detailing the work it is doing and has done to obtain alternative capacity. EPA or the Participating State Director can grant or deny the requested extension. Extensions will vary on a case-by-case basis under this section but in no event will the EPA extend the deadline past October 15, 2023. 

If a facility certifies that it will cease operation of its coal-fired boiler by a date certain, new Section 103(f)(2) provides a separate set of extensions. Once again, these extensions are not self-implementing. The owner or operator must submit extensive documentation to the EPA or Participating State Director to seek approval for the extension, but unlike under new Sections 103(e) and 103(f)(1), the facility need not demonstrate technical infeasibility or a need for alternative capacity, because the power plant itself is scheduled to close. Rather, the owner or operator must submit and post, as part of its documentation, a plan to mitigate potential risks to human health and the environment from the continued use of the CCR impoundment. For surface impoundments under 40 acres, the 103(f)(2) extension can run to October 17, 2023. For surface impoundments larger than 40 acres, the extension can run to October 17, 2028. 

Criticisms of EPA's New Rules and Potential Citizen Suits 

Several environmental advocacy groups have assailed EPA's November 4, 2019 proposed rulemaking as yet another attempt to weaken the 2015 Coal Ash Rule. By contrast, the electric power industry has hailed these changes as providing much needed flexibility as utilities navigate the complicated process of retrofitting or closing hundreds of existing CCR impoundments. This debate will continue to play out in public over the next several months as EPA finalizes its new rules and utilities post their technical infeasibility documentation to their websites. 

What remains to be seen is whether environmental advocacy groups will challenge EPA's new rulemaking as "arbitrary and capricious" or whether those same groups will initiate citizen suits against utilities because their technical infeasibility documentation does not do enough to ensure that their CCR impoundments pose "no reasonable probability of adverse effects on health or the environment" under RCRA Section 4004(a). As reported in our prior updates, courts take varying approaches to citizen suits when utilities are grappling with how to comply with a complex and ever-shifting set of regulations. Some defer to the agency, while others allow advocacy groups to second-guess utilities closure plans.