The Real Cost of the CCR Rule

Issue 11 and Volume 119.

By Sam Yoder, P.E., and Robynn Andracsek, P.E., Burns & McDonnell

On April 17, 2015, the Environmental Protection Agency (EPA) issued the final version of the federal Coal Combustion Residual (CCR) Rule to regulate the disposal of CCR materials generated at coal-fired units. The requirements took effect on October 19, 2015; you may still be reeling over the quick timeline to implement this complex regulation. By now, CCR facilities should already have an operating record and a public website populated with data:

  • October 19, 2015

– Post first 7-day and 30-day inspections to operating record

– CCR public website goes live

– Post fugitive dust plans to operating record

  • November 18, 2015 – Post fugitive dust plans to public website
  • December 17, 2015

– Post intent to close documents to operating record (for any inactive impoundments)

– Operating record must indicate that the surface impoundment marker was installed

  • January 16, 2016 – Intent to close documents published to public website
  • January 19, 2016 – Post annual inspection reports in operating record
  • February 18, 2016 – Post annual inspection reports on public website

Compliance costs are significant for short-term and long-term. EPA estimated that the rule would impose 12 regulatory costs: (1) Groundwater monitoring; (2) bottom liner installation; (3) leachate collection system installation and management; (4) fugitive dust controls; (5) rain and surface water run-on/run-off controls; (6) disposal unit location restrictions (including water tables, floodplains, wetlands, fault areas, seismic zones, and karst terrain); (7) closure capping to cover units; (8) post- closure groundwater monitoring requirements; (9) impoundment structural integrity requirements; (10) corrective actions (CCR contaminated groundwater cleanup); (11) paperwork reporting/recordkeeping; and (12) impoundment closures and conversion to dry handling. According to EPA, the rule may affect 414 coal-fired electric utility plants and calculates the cost of the rule over a 100 year period in part because a CCR unit’s life spans 40 to 80 years. EPA’s estimate of nationwide compliance is an average annualized cost of approximately $509 million per year. However, since these values are for all affected facilities combined, this is of little comparison value for understanding the costs at an individual pond or facility.

During the last six months, power plant owners have been scrambling to containerize dry CCR piles, implement groundwater monitoring programs, relocate sluiced CCR materials from one pond to another, and close any ponds they can in order to reduce the number of CCR surface impoundments that will be subject to the full requirements of the rule. In general, the cost to perform these initial efforts has been between $2 million and $5 million for plants that need to comply with the immediate requirements of the rule.

Weekly, monthly, and annual inspections will continue until closure and cost approximately $125,000 to $175,000 per landfill or surface impoundment. This is a recurring annual cost to complete all the required reporting. There will also be significant costs associated with the inspections and safety factor assessments beginning early next year and required every five years after.

For some facilities there could be liner retrofit costs incurred to allow for continued operation, depending on state and Effluent Limitations Guideline requirements for sluicing systems moving forward.

One compliance solution is to undergo a wet to dry conversion for which costs can vary drastically depending on the footprint available at each plant ($30 million to $90 million). Similarly, the closure of a pond can vary greatly from depending on the size and quantity of CCR material in the pond. Some have seen costs as high $80 million to $100 million; however, most have been in the $30 million to $50 million range.

Potential corrective actions, such as a pump and treat system or in situ technology, have significant unknown and critically important costs. As utilities are considering future closure options, the possibility of groundwater impacts should be taken into account for those impoundments that will remain active after October 19, 2015. For these impoundments, clean closure could be more cost effective in the long run than a cap-in-place option, which has the potential for years of corrective action. Feasibility studies evaluating the potential for groundwater impacts may be useful at this point in time for strategic cost savings down the road.

Given the short time frame for executing projects associated with the CCR rule, the best information on compliance costs will only be available after the fact.