The Past, Present and Future of Coal Ash Management in Virginia Presentation to the State Water Commission June 23, 2014

Presentation to the State Water Commission David Paylor, Director Clyde Cristman, Director 2

Discussion Items Update on Duke Energy ash clean up project DEQ regulates water discharges Proposed federal requirements DCR regulates impoundment structures Discussion & Questions 3

Duke Energy Coal Ash Spill Update February 2, Coal ash and contaminated water discharged from a broken stormwater pipe into the Dan River at a Duke Energy facility near Eden, NC. The broken pipe ran under a coal ash containment basin. Release of ash into river halted (early February) Removal of ash deposits continues 4

Site Location: 5

Administrative Order and Agreement of Consent  Enforceable agreement between Duke Energy and EPA (May 2014)  Requires Duke Energy to:  perform a comprehensive assessment  determine the location of coal ash deposits  remove deposits along the Dan River as deemed appropriate  EPA ash survey of bottom sediment along the 70 mile length of the river has found no stations exceeding 20% ash content due to ash being mixed and buried by native sediment  Ash recovery at Danville-Schoolfield Dam site continues with completion anticipated first week of July 6

NRDA Funding and Participation Agreement  Signed by Duke Energy and environmental trustees including VADEQ, NCDENR and USFWS (June 2014)  Initiates the cooperative Natural Resource Damage Assessment and Restoration (NRDA) process, to evaluate the impact of the spill and to ultimately restore any injured/affected natural resources  Includes opportunities for public engagement during restoration planning 7

On-going Efforts DEQ continues monthly river and lake water quality and sediment monitoring DEQ is coordinating with the Dan River Basin Association to have additional testing done at several locations. This information should be helpful in identifying the potential need for DEQ to do follow-up monitoring Fish tissue collection has begun at first of 8 sites Virginia enforcement action still under evaluation 8

Regulated Ponds in Virginia 9

Virginia’s Ash Impoundments CompanyLocation# of Active Units DominionBremo Bluff2 DominionChesapeake Energy1 DominionChesterfield2 DominionPossum Point 1 2 American Electric PowerGlen Lyn1 American Electric PowerClinch River2 Celanese, llcNarrows1 Mead WestvacoCovington1 1 Recently discovered an additional inactive impoundment at this site 10

What is Coal Ash: Residue generated from burning coal. Generally disposal is onsite disposal or beneficially reused Ash has a large variety of constituents, it mostly consists of silicon oxide, iron oxide, and aluminum oxide. Trace amounts of arsenic, selenium, mercury and other metals Ash composition varies widely depending on the coal type and origin, burning regime and air pollution control equipment 11

Coal Ash Generated in Virginia YEARTONS (Million) As reported by the 2 largest generators of CCR 12

Landfill  8 Active Landfills in Virginia Surface Impoundment  12 active surface impoundments at 7 facilities operated by 3 owners Beneficial Reuse  Structural fill, concrete, wall board, agricultural Management Alternatives 13

Surface Impoundment Operations Impoundments constructed with a natural clay liner Ash transported with water to impoundment Solids settle, overflow water discharged to surface water under a VPDES permit 14

Surface Impoundment Operations Discharge permit limits and requires monitoring for  pH, oil& grease, total suspended solids, metals (varies by permit)  discharges tested for toxicity and passed assessment, therefore no metals limitations Groundwater monitoring required  Upgradient/downgradient monitoring for metals, and indicator parameters (e.g. pH, conductivity) Inspections and oversight joint responsibility of DEQ and DCR  DEQ permits discharge  DCR regulates berm under dam safety program 15

Surface Impoundment Operations Upon reaching design capacity, ponds are closed by dewatering, breaching berm structure and installing a permanent cap/cover (subject to DCR and DEQ review) DEQ evaluating options for closure similar to an industrial landfill (including post closure monitoring, maintenance and institutional controls) 16

CCR Federal Regulatory Framework As a result of the TVA incident, EPA proposed new regulations:  June 21, 2010  Proposal for Subtitle D (solid waste) or Subtitle C (hazardous waste) 2 proposals for continued use of impoundments  5 years to retrofit with liner systems or close  continue use until design capacity is reached 17

Next Steps Work with Owner/Operators on long term strategy for phase out of ponds Post Closure care requirements including groundwater assessment and review 18

Summary of EPA’s Assessment In 2013, US EPA concluded a review of structural integrity assessments of the nation’s ash impoundments. In Virginia, none of the units were found to have an unsatisfactory rating. Impoundment owners provided responses to issues and concerns raised by EPA. Both agencies reviewed company responses to EPA studies. No known releases have occurred at these facilities and owners have followed up on EPA recommendations. 19

Dam Safety Act DCR regulates Impounding Structures Including 13 CCR Impoundments Regulated Impounding structure defined: 1. Man-made structure to retain or store waters or other materials 2. >25 feet height and >15 acre-feet capacity 3. >6 feet height and >50 acre-feet capacity 20

Dam Safety Act The owner shall be responsible for liability for damage to the property of others or injury to persons, including, but not limited to, loss of life resulting from the operation or failure of a dam. Code Enforcement. Code Criminal penalties. Code Civil penalties. Code

Impoundment Structure Regulations DCR issues: Regular Operation & Maintenance Certificates Impoundments meeting safety requirements Conditional Operation & Maintenance Report Specifies deficiencies & deadlines Construction Permits Alteration Permits 22

Impounding Structure Regulations Provides for proper and safe design, construction, operation and maintenance of impounding structures to protect public safety Owner’s Professional Engineer provides DCR: Construction & alteration plans Inspection Reports Dam Break Inundation Map & Study Hazard Classification Determination Emergency Action Plans 23

Discussion & Questions 24