Georgia Power customers could be stuck paying billions more for toxic waste disposal

Caption

A part of the coal ash pond adjacent to Georgia Power’s Plant Scherer, seen from the air in August 2019.

Credit: Grant Blankenship, GPB News

Georgia Power plans to dispose of toxic waste at a number of coal plants around the state using a method that the EPA recently clarified is banned by federal rules and risks contaminating drinking water.

The Biden administration has ramped up enforcement of the relevant rule in other states, notably by prohibiting an Ohio coal plant last year from storing its coal ash in contact with groundwater.

Now, a public service commissioner charged with regulating the power company has told McClatchy in an interview that, if the federal government forces Georgia Power to clean up toxic waste at some of the state’s coal plants in line with federal regulations, he would support sticking the utility’s 2.7 million ratepayers with the bill, which would likely run in the billions.

Pressed on why, he said the commission couldn’t expect Georgia Power to “read the mind of the president and the EPA” to anticipate shifting rules. The relevant rule hasn’t changed since it was put in place in 2015.

It might not come to that, the commissioner added. If a Republican wins the White House in 2024, he noted, the EPA might relax enforcement — and Georgia Power could continue business as usual.

WHO PAYS FOR COAL ASH CLEANUP?

It’s possible that Georgia Power will eventually be forced to comply with a federal rule banning the storage of coal ash in contact with groundwater at a number of its coal plants across Georgia — including Monroe County’s Plant Scherer — where it plans to “cap in place,” or where it already has done so.

Capping in place refers to storage of coal ash, a hazardous byproduct of the coal production process, in a covered but unlined pit. State regulators have not yet issued permits approving the power company’s plans.

Georgia Power has not released estimates of how much it would cost to dispose of the waste by an alternate method, saying this information is a trade secret. In 2021, an investigation by Georgia Health News and ProPublica found that the cap-in-place plan would cost ratepayers $7.3 billion — and estimated that an alternate cleanup method would likely cost more than $10 billion.

If the utility is forced to employ a safer cleanup method, the crucial question of who pays for it will be decided by the Public Service Commission, an elected five-member body tasked with regulating Georgia Power and other utility companies.

Georgia Power’s operational costs — such as the construction of new power plants, or the decommissioning and cleanup of coal plants — are generally paid for by its ratepayers via electricity rates set by the PSC.

However, the PSC also has the option to decide that a given expenditure by the utility was “imprudently incurred” — if it could have been foreseen and avoided — and require Georgia Power to cover the costs itself. Georgia Power is owned by the Southern Company, a Fortune 500-listed corporation that owns utilities across the Southeast.

So if Georgia Power is forced to dispose of its coal ash in compliance with federal rules, will the PSC consider the utility’s ongoing cap-in-place strategy an imprudent expense (given that the rule this violates was written in 2015) — or will they effectively bill ratepayers twice for the coal ash cleanup?

McClatchy put this question to Public Service Commissioner Tim Echols in March, when he met a reporter for lunch in Macon, where his wife works as a pastoral counselor.

READING THE PRESIDENT’S MIND?

Echols agreed that the PSC has the power to charge Georgia Power, rather than ratepayers, for the costs of “imprudent” action, saying, “The Public Service Commission can rule any power company decision imprudent if we feel that they have been imprudent.”

He also acknowledged that an alternate cleanup strategy would be costly.

“With cap-in-place, you don’t have to line it. There are some that want to dig up the entire pond, move it, line it, and put it all back. That’s the really expensive option. We considered that,” Echols said.

But his explanation of why he would not hold Georgia Power accountable for this arguably avoidable expense seemed to rest on a claim that the EPA had changed its mind on the 2015 rule.

“Are we asking the power company to read the mind of the president, to be able to predict the future, to know if the EPA is going to be consistent, when we’ve seen them change rule after rule going back and forth?” Echols said. “I know I would not feel comfortable telling our power company, ‘You should have known that eventually this would have been changed, therefore, shame on you, and you’re going to have to pay for this and eat all of this [cost] because you couldn’t read the mind of the president and the EPA.’”

“Georgia EPD has not made a final determination of the EPA’s new interpretation of the 2015 CCR Rule. I understand that they are communicating regularly,” Echols said in an email when asked to clarify what rule change he was referring to.

The reason Georgia’s Environmental Protection Division, or EPD, is involved — and why its “determination” is relevant — is that Georgia is one of a handful of states that sought and received permission from the federal government to run its own coal ash program.

However, this came with the condition that their standards had to be at least as stringent as those of the EPA, Southern Environmental Law Center attorney Chris Bowers told McClatchy.

“The delegation from EPA to Georgia to have a CCR permit program under delegated authority was conditioned on the assurance that, in Georgia, the program would be at least as protected as the federal standard” — and therefore “it’s clear that it would be unlawful and improper [for Georgia] to allow closure in place with groundwater if it’s not appropriate elsewhere,” Bowers said.

EPA wrote EPD a letter in Jan 2022 saying its position was, and had always been, that the CCR rule prohibits storage of coal ash in contact with groundwater. Both Georgia Power and the EPD publicly referred to this as a new interpretation — a framing Echols seems to be echoing in his comments to McClatchy

In December, Jacob Hawkins, a Georgia Power spokesperson, told McClatchy in an email, “Georgia Power’s closure plans are designed to comply with both the federal and state CCR rules, and the company will continue to work with the Georgia EPD to ensure our closure plans remain in compliance with these rules. The company will continue to seek to recover all prudently incurred costs.”

PSC RESPONSIBILITY

Echols also argued that, regardless of the merits of the utility’s existing cleanup strategy, it would be unfair for the PSC to penalize Georgia Power for decisions the commission authorized it to take.

Echols said the PSC was given the authority to pre-certify the utility’s expenses in a 1991 law, the Integrated Resource Planning Act. “

Our commission ultimately can compel the power company to do various actions, including capping in place, including building this plant or that plant. We can compel them. That is the regulatory compact that was created in Georgia in 1991,” Echols said.

Echols noted that this law was passed by a Democratic-majority legislature and signed by a Democratic governor, Zell Miller. He said it was written in response to cost overruns involved in the construction of the first two nuclear reactors at Plant Vogtle and of Plant Scherer.

As a result of the 1991 statute, Echols said, “there’s no incentive really for the utility to shortcut any system — for them to have trucks that break down or low-quality poles, or to do a poor job at Plant Scherer — because they’re getting full recovery for all of those things.”

So it wouldn’t be fair, Echols said, to consider the utility’s coal ash cleanup strategy imprudent.

“While some people might feel like, wow, they should have just proactively gone ahead and done all of this as it relates to coal ash ponds, our commission felt like complying and taking this course of action was the most prudent approach to take, and we approved that and gave them the money for that,” Echols said.

EPA OVERHAUL?

When a reporter said it was his understanding that the utility would likely eventually be forced to abandon its cap-in-place strategy for coal ash ponds at Plant Scherer and elsewhere, Echols responded, “Maybe.”

“If President Biden doesn’t win reelection, that could change,” Echols elaborated. “It seems like every administration makes major EPA overhauls. So do we, knowing there’s such a lag time for this, do we jump the gun and say, look at the Ohio situation, we better go ahead and change ours?”

To Fletcher Sams, executive director of the Altamaha Riverkeeper, the suggestion that the state could wait for a Republican administration before reevaluating its coal ash plans amounts to “saying the quiet part out loud.”

“Since 2015, it’s been illegal to close the waste in contact with groundwater due to a rule that’s been unchanged by the three most recent presidents,” Sams said in a text message. “It’s common sense that you can’t leave coal ash in groundwater and the rules say that. [While] the PSC does have the responsibility to regulate and pre-certify the power company projects, I don’t believe that the process should disregard an 8-year-old rule in hopes of a political solution.”

This story comes to GPB through a reporting partnership with The Telegraph.