Steptoe & Johnson LLP
Anthony G. Hopp, Libretta Stennes and Christopher W. Smith

October 4, 2017

This October marks the deadline for the implementation of groundwater monitoring and corrective action under the Disposal of Coal Combustion Residuals from Electric Utilities Final Rule – the Coal Ash Rule – or does it?

Recent legal activity has not only called into question when the final rule will be implemented, but also has opened the possibility of further Environmental Protection Agency (EPA) rulemaking. Interested parties on both sides are closely watching the administration, the regulated community, and various non-governmental organizations (NGOs) as they support, challenge, and work to implement the Coal Ash Rule (the Rule).

The Rule was published on April 17, 2015 and became effective on October 19, 2015. It is the first federal rule to regulate coal ash waste disposal in landfills and surface impoundments, establishing minimum national criteria for coal combustion residuals (CCR) landfills and CCR surface impoundments and includes a number of technical reporting requirements for public disclosure of information. Sites must be retrofit to meet certain criteria, including location restrictions, structural integrity requirements, liner design criteria, groundwater monitoring and corrective action requirements, operating criteria (e.g., fugitive dust), closure and post-closure care requirements, and recording, notification, and Internet posting requirements. Sites that fail to meet these criteria must close.

Some key milestones in the implementation of the Rule have already passed, including inspections, design criteria, and development of emergency action plans. The EPA required public disclosure of compliance information, including through websites “because this rule is self-implementing and is enforced by citizens and states using the citizen suit provisions of section 7002 of the Resource Conservation and Recovery Act (RCRA).” This appears to be the first time that the EPA has published a rule and then publicly invited citizens and public interest groups to take the lead in policing the regulated industry. The public disclosures mandated by the Rule give citizens and public interest groups the information necessary to mount RCRA citizen suits – and several of those groups recently signaled a clear intention to use RCRA citizen suits as a means to enforce the Rule.

For example, on September 20, 2017, the Southern Environmental Law Center and Earthjustice sent notice of intent to sue letters to more than a dozen Duke Energy sites located in Indiana, Kentucky, and North Carolina. The letters alleged relatively minor compliance violations based on redactions contained in the materials that Duke Energy had released as part of the required emergency action plan for surface impoundments. The letters also allege that Duke Energy failed to include a map that delineates downstream locations that might be affected in the event of a CCR failure. The letters purported to give Duke Energy 60 days to get into compliance or face litigation under RCRA.
While Duke Energy promptly took responsive action that likely will satisfy these specific letters of intent to sue, it is easy to imagine other potential implementation challenges or alleged compliance violations that are more complex and will potentially require both timely responsive actions and resources to address the challenges both before the EPA and in the courts. NGOs likely will not hesitate to search for and call out these alleged violations because most of the information they need is available online.

Against this backdrop, a currently pending lawsuit seeks to challenge the Rule. The Utility Solid Waste Activities Group (USWAG) filed the lawsuit in 2015, and several citizens groups, including Clean Water Action, Environmental Integrity Project, Hoosier Environmental Council, PennEnvironment, Prairie Rivers Network, Sierra Club, Tennessee Clean Water Network Waterkeeper Alliance, and Comité Dialogo Ambiental, Inc. have intervened. Oral arguments on USWAG’s challenge to the Rule was scheduled for October 17, 2017 before the DC Circuit, but the court has rescheduled the argument while the EPA decides which portions of the Rule it intends to reconsider through new rulemaking. However, new rulemaking is a time consuming process, and several years of additional litigation are inevitable before any portion of the Rule may be rolled back or rescinded.

In the meantime, more energy companies can expect to receive 60 day notice letters threatening RCRA citizens’ suits over any number of actual or alleged violations of the Rule. As the EPA addresses whether it will undertake additional rulemaking, regulated parties may find themselves in periods of uncertainty regarding what, if any, costs to undertake to implement technical measures to either bring active ponds into compliance with the demands of citizens and NGOs or to close their CCR impoundments.

Drawing from multiple practices, Steptoe will host a webinar on December 13 that delves deeper into potential business, regulatory, and litigation risks surrounding compliance with the Rule. To register, click here. In the meantime, if you have questions or would like more information, please contact Tony Hopp at +1 312 577 1249, Libby Stennes at +1 202 429 8099, or Christopher “Smitty” Smith at +1 213 439 9452.

This article is being provided for informational purposes only and not for the purposes of providing legal advice or creating an attorney-client relationship. You should contact an attorney to obtain advice with respect to any particular issue or problem you may have. In addition, the opinions expressed herein are the opinions Mr. Hopp, Ms. Stennes and Mr. Smith and may not reflect the opinions of Synergy Environmental, Inc., Steptoe & Johnson LLP or either of those firms’ clients.