To Whom It May Concern,

 

We are writing to urge the Environmental Protection Agency to reverse its position and mandate financial assurances for the electric power industry in the proposed rule regarding Financial Responsibility Requirements under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Section 108(b) for Facilities in the Electric Power Generation, Transmission, and Distribution Industry. Without federally mandated financial responsibility requirements there is substantial risk that clean-up efforts for widespread coal ash contamination will be underfunded and would pose a significant health risk for the 115 million U.S. citizens that rely on groundwater sources for drinking.

Human Rights Watch is an independent nongovernmental organization that monitors and reports on human rights abuses in 90 countries around the world, including the United States. A significant issue that Human Rights Watch monitors is compliance with the rights to safe water and a healthy environment.

CERCLA, also known as “Superfund,” was passed in 1980 to ensure that industries engaged in activities with high risk of pollution maintain sufficient financial resources to clean up any pollution they cause. As such, it mandates that the EPA direct industries to “establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated” with their activities. 

We are alarmed that the EPA is proposing a rule contrary to that intent that would not require any financial assurances from the electric power industry that companies have the funds to clean up pollution harmful to humans, despite the extensive evidence of coal ash pollution that has recently come to light and the recent or planned closure of dozens of coal-powered electric plants.[1] We are concerned that absent financial assurances, companies will be unable to adequately fund these clean-ups, leading either to prolonged public exposure to pollution or that companies will shift the liability for clean-up to taxpayers or consumers, including those impacted by that pollution.

Coal ash, a byproduct of burning coal for energy, contains hazardous pollutants including arsenic, boron, cadmium, chromium, lead, radium, and selenium.[2] These toxins have been shown to significantly increase the risk of cancer, heart disease, reproductive failure, stroke, and lasting brain damage in children.[3] In 2017, coal-fired plants generated over 110 million tons of coal ash, making the toxic substance one of the largest industrial waste streams in the United States.[4] Billions of tons of legacy coal ash waste remain in unlined pits and continue to contaminate groundwater, and the risk of catastrophic spills poses a serious threat to both ground and surface water.

In accordance with the 2015 Coal Combustion Residuals Rule, coal-fired electric utilities were required to publicly report groundwater monitoring data near coal ash storage sites for the first time on March 1, 2018. According to EarthJustice, an independent nonprofit organization that closely tracks coal ash pollution, 91 percent of reporting coal-fired plants have contaminated groundwater with toxic substances at levels exceeding federal safety standards.[5] The EPA itself has identified 24 sites where coal ash ponds or landfills have contaminated private wells.[6]

The case of North Carolina highlights both the health risks of coal ash pollution and the staggering cost of cleaning up legacy waste. In 2014, a drainage pipe under a Duke Energy coal ash pond erupted, spilling 39,000 tons of toxic waste into the Dan River. Hundreds of families continue to rely on bottled water due to water contamination.[7] Groundwater tests near another Duke-owned coal ash pit in the state showed contamination levels of manganese, an element that has been linked to neurological damage , at 7,100% higher than state groundwater standards.[8] On April 1, 2019, the North Carolina Department of Environmental Quality (NCDEQ) ordered Duke Energy to fully excavate its remaining coal ash pits in the state and move the toxic waste into lined landfills – a clean-up effort that the company estimates will bring the utility’s total cost of cleaning up coal ash to $10 billion.[9]

The Duke spill was the third largest in U.S. history, yet when the EPA analyzed coal ash pollution cases and their reliance on public funds for clean-up, the EPA excluded it, along with the vast majority of coal ash clean-up cases. It significantly weakened its analysis by only including pollution generated under the “modern regulatory framework,” meaning after the Coal Combustion Residuals Rule was enacted in 2015.[10] This questionable methodology ignored the costs of cleaning up decades of pollution that were only disclosed because of that rule. Even in the short timeframe the EPA considered, it found two cases where public funds were needed to pay for clean-ups, but it did not consider those to be sufficient to mandate financial assurances. 

This decision is especially surprising in light of the financial precariousness of the coal-powered electric industry and the potential liabilities this development might impose on taxpayers. Coal consumption is at its lowest point in four decades, as plants are opting to shift to natural gas as a cheaper alternative.[11] Power companies have announced plans to shutter dozens of coal-fired plants in the next five years.[12] Reflecting the industry’s financial insecurity, last month, the largest commercial insurer in the United States, Chubb, announced that it will stop insuring new coal-fired power plants and place restrictions on coverage for electric companies generating more than 30 percent of energy from coal.[13] But just as the EPA underestimated potential clean-up costs by unduly narrowing its timeframe for assessing previous contamination cases, it underestimated the financial risks specific to coal-fired plants by assessing the financial health of the electric-power industry as a whole to the detriment of taxpayers and public health. 

The subsequent determination that no financial assurances are necessary raises serious concerns that companies will not ensure that they have sufficient financial resources to clean up their pollution, in some cases that have been generated for decades. This approach will likely mean that necessary clean-ups will be delayed, incomplete, or never carried out in the first place. It also increases the chance that the cost of cleaning up coal ash will fall to taxpayers and consumers. The EPA already identified two cases in the past four years where the public funded coal ash clean-ups, and Duke Energy has already received approval to pass on $546 million of its clean-up costs onto its consumers in North Carolina.[14] These taxpayer-subsidized clean-ups could largely be avoided if the EPA required companies to ensure they could pay for potential clean-up. This approach would also eliminate the double penalty people impacted by pollution would otherwise pay: first the cost to their health and second the fact that their taxes would have to pay to clean up that damage. 

The “Polluter Pays” principle is enshrined in US law under the Clean Water Act, the Clean Air Act, Resource Conservation and Recovery Act, and CERCLA. It represents a reliable, pragmatic way of ensuring that harms to the environment and human health are remedied promptly and effectively. It is also a key environmental principle. Principle 16 of the 1992 Rio Declaration on Environment and Development, endorsed by 178 countries including the United States, called on national authorities to internalize environmental costs “taking into account the approach that the polluter should, in principle, bear the cost of pollution.” 

States have a duty to ensure that businesses do not contribute to human rights abuses, which include endangering public health with toxic pollution, and that the harmful impacts of their activities are effectively remedied. Businesses have a separate responsibility to provide for or cooperate in the remediation of any adverse human rights impacts they cause or contribute to, through legitimate processes. 

Ensuring that polluters pay is important not only to increase the likelihood of effective clean-ups but also to disincentivize pollution in the first place. Shifting the cost to the public or consumers allows companies to reap the financial rewards of lax environmental practices and further burdens those who already bear the risks of the pollution. 

In light of the above, Human Rights Watch believes that the EPA’s proposal not to mandate financial responsibility requirements for the electric power industry risks endangering public health and allowing polluting businesses to escape accountability. It would also likely transfer significant costs to U.S. taxpayers.  

We respectfully urge the EPA to reverse its proposed rule and require financial assurances for the electric power generation, transmission, and distribution industry. 

Thank you for the opportunity to share our views.

 

Sincerely,

 

Arvind Ganesan

Director

Business and Human Rights


[1] “50 U.S. coal power plants shut under Trump,” Agence France-Presse, May 9, 2019, https://phys.org/news/2019-05-coal-power-trump.html; “The Cleanup Toolkit: Mapping the Coal Ash Contamination,” EarthJustice, July 23, 2019, https://earthjustice.org/features/map-coal-ash-contaminated-sites.

[2] Environmental Protection Agency, “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals From Electric Utilities,” Federal Register, April 17, 2015, https://www.federalregister.gov/documents/2015/04/17/2015-00257/hazardou....

[3] Environmental Protection Agency, “Human and Ecological Risk Assessment of Coal Combustion Waste (Draft),” April 2010. See also Physicians for Social Responsibility and EarthJustice, Coal Ash the Toxic Threat to Our Health and Environment (2010) and Clara G. Sears and Kristina Zierold, “Health of Children Living Near Coal Ash,” Global Pediatric Health, vol. 4: 1-8, 2017.

[4] American Coal Ash Association, 2017 Coal Combustion Product (CCP) Production and Use Survey Report (Farmington Hills: 2017), https://www.acaa-usa.org/Portals/9/Files/PDFs/2017-Survey-Results.pdf.

[6] ibid.

[7] Bruce Henderson, “They’ve Used Bottled Water to Drink, Cook, Bathe for 1,000 Days. When Will Taps Flow Again?” The Charlotte Observer, January 11, 2018, https://www.charlotteobserver.com/news/local/article194196774.html.

[8] Sue Sturgis, “Is a Duke Energy Power Plant Making Nearby Residents Sick?” Facing South, May 1, 2014, https://www.facingsouth.org/2014/05/is-a-duke-energy-power-plant-making-... World Health Organization, “Manganese in Drinking-Water: Background document for the development of WHO Guidelines for Drinking-water Quality,” 2011, p. 13, http://www.who.int/water_sanitation_health/dwq/chemicals/manganese.pdf (accessed October 19, 2018).

[9] “NCDEQ Orders Duke Energy to Excavate All Remaining Coal Ash Impoundments,” North Carolina Manufacturers Alliance, April 1, 2019, https://www.myncma.org/ncdeq-orders-duke-energy-to-excavate-all-remainin....

[10] Environmental Protection Agency, Financial Responsibility Requirements Under CERCLA Section 108(b) for Facilities in the Electric Power Generation, Transmission, and Distribution Industry [RIN 2050-Ag93; FRL-XXXX-XX-OLEM] Pre-Publication Document, July 2, 2019, https://www.epa.gov/sites/production/files/2019-07/documents/pre-publica....

[11] U.S. Energy Information Administration, “U.S. coal consumption in 2018 expected to be the lowest in 39 years,” December 28, 2018, https://www.eia.gov/todayinenergy/detail.php?id=37817.

[12] U.S. Energy Information Administration, “More U.S. coal-fired power plants are decommissioning as retirements continue,” July 26, 2018, https://www.eia.gov/todayinenergy/detail.php?id=40212

[13] Jonathan Boyd, “Coal dinged by insurance refusals,” Investment Europe, July 1, 2019, https://www.investmenteurope.net/news/4002909/coal-dinged-insurance-refu....

[14] Bruce Henderson, “NC Orders Duke Energy to Dig Up Millions of Tons of Coal Ash at Six Power Plants,” The Charlotte Observer, April 1, 2019, https://www.charlotteobserver.com/news/politics-government/article228681....