Regulators lacked resources

Mar 16 - News & Record (Greensboro, NC)

 

When federal investigators review years of reports they have subpoenaed from the N.C. Utilities Commission , they'll likely be struck by the many times Duke Energy and state officials missed opportunities to prevent the recent Dan River coal ash spill.

Interviews with several people involved in the commission's review process suggest that North Carolina officials relied for nearly 35 years on a flawed system to study, track and correct problems with coal ash ponds at the power plant in Eden and 13 other sites across the state.

The environmental issues that are the focus of a federal grand jury convening this week in Raleigh were not front and center during the decades that the commission held sway over the ash ponds until 2010, they said.

Regulating ash ponds and the dams that restrained them fell outside the commission's normal duties of setting public utilities' rates and supervising their services.

"We felt like we were sort of doing somebody else's work for them," retired utilities commission engineer David F. Creasy said about the burden of regulating the dams. "State law gave us jurisdiction. Somebody else had all the other (dams), except those that were owned by the utilities."

The commission's public staff, which looks out for the consumer in cases before the utilities board, lacked expertise in ash pond engineering.

They examined the coal ash reports mainly to make sure their recommendations seemed sensible and didn't threaten to disrupt service or raise rates for consumers, said James McLawhorn , the director of the public staff's electric division since 2006.

In fact, the utilities commission relied on another agency that had no authority over the ponds to interpret the periodic inspection reports and then entrusted the power company itself to fix any problems spotted in the reports.

"We receive reports and forward them on to the Division of Environmental and Natural Resources , who has the expertise to look at those reports and report back to us," Commission Chairman Edward Finley said in a 2009 commission hearing, "And to the extent they find deficiencies in those reports, we communicate those (flaws) to the power companies, and hopefully, they are rectified."

Though it no longer regulates ash ponds -- the General Assembly shifted that duty to the N.C. Department of Environment and Natural Resources in 2010 -- the commission's take on what happened and who's to blame could be even more relevant today, as state government pushes Duke Energy to begin closing its 30-plus ponds and safely disposing of their toxic contents.

Both Gov. Pat McCrory and state Senate President Pro Tem Phil Berger have signaled that the utilities commission will play an important role in deciding how much of those cleanup costs will be borne by Duke Energy and its shareholders and how much by utility customers in their power bills.

Meanwhile, the U.S. Attorney's Office for Eastern North Carolina has begun an investigation of state government's ash pond regulation after the Feb. 2 spill near the retired Dan River Steam Station sent millions of gallons of wastewater polluted by coal ash 70 miles or more downstream.

The spill occurred when a drainage pipe ruptured beneath the Dan River ash basin, a pipe cited repeatedly as a potential problem in engineering reports that Duke Energy submitted regularly to the commission during its decades of ash pond oversight.

When legislators changed state law in January 2010 to lift supervision of the ash ponds from the commission, they vested it in the DENR's dam-safety office, which has experts on its staff and which supervises the other 3,650 dams regulated by state law. So the DENR bore the brunt of public outrage over last month's Dan River disaster, the third worst coal ash spill in U.S. history.

But the utilities commission's fingerprints also smudge North Carolina's coal ash legacy. The commission responded last week to a public records request from the News & Record by acknowledging that federal prosecutors subpoenaed some of its ash pond reports and other documents in the criminal investigation spawned at least partly by the Dan River spill.

No one from the utilities commission's seven-person board or its staff was summoned to testify, although that could change depending on what direction the investigation takes.

The subpoena seeks commission records dating back to 1995, possibly to give investigators and the Raleigh -based grand jury a historical perspective on the Eden spill and other recent events involving the ponds full of toxic ash that are dispersed from Wilmington to the Triad and from Charlotte to Asheville .

Those records include detailed inspection reports that the commission required Duke Energy to produce every five years for ash basins at Dan River and its other plants with ponds for coal waste. The ashes result from burning pulverized coal to generate electricity, and they contain potentially harmful concentrations of heavy metals.

Each of the Eden plant's reports under subpoena -- from 1996, 2001 and 2006 -- cites the pipe that burst and another one nearby as potential problems.

But the evidence of warnings overlooked or ignored at the Dan River plant goes back even further among the detailed inspection reports that began in 1976, when the commission started requiring them from Duke and other utilities with ash ponds.

Remember the surprise that officials expressed last month on discovering that relatively weak, corrugated metal made up part of the pipe that ruptured, causing the massive Feb. 2 spill?

The pipe was one of two drainage culverts running under the Dan River ash basin, both of which were designed to carry uncontaminated stormwater from behind the ash ponds under the polluted basin and out to the river.

Here's what the 1986, five-year report said about part of the first pipe, the part destined to rupture so dramatically 28 years later:

"Part of this culvert is constructed of corrugated metal pipe which would be expected to have less longevity of satisfactory service than the reinforced concrete pipes," engineering consultants Clay Sams and Fred Tucker warned Duke and the commission in their 1986 report.

There's more. Duke's 1981 report to the commission for the Dan River ash basin singled out the other drainage pipe under the pond, the one that didn't rupture last month. That report, 33 years ago, suggested additional testing on this second pipe "to check for joint leakage."

More than three decades later, Duke Energy ran a robot video camera up that second pipe, a week or two after the larger one ruptured to cause the huge spill.

It found joint leakage of polluted water, running down into the second pipe from the contaminated ash pond above and then out toward the river.

Both pipes have now been plugged.

Sam Watson , the utilities commission's general counsel, declined to comment on the group's stewardship of the ash ponds and how intensively the board considered each of the five-year inspection reports over the years because the federal inquiry also might cover such topics.

The subpoena requests 42 of those five-year inspection reports, the last three for Dan River and for each of the other 13 sites of active or inactive coal-fired plants where Duke Energy stores ash in ponds.

Geotechnical expert Sams, a Charlotte resident, has as much detailed engineering knowledge of the Dan River ash basin as anyone. He helped write all of the Dan River reports under subpoena and the 1986 study that highlighted the fragility of the corrugated metal drainage pipe almost 30 years before it failed.

In addition, he and a partner prepared at least 14 of the ash pond reports subpoenaed for the grand jury, including two under subpoena for the Belews Creek Steam Station in Stokes County . Reached by telephone last week, Sams declined to comment.

Former utilities commission engineer Creasy said that during his years as the commission's engineer, he looked at the five-year reports carefully but mainly to make sure that they had been prepared by a competent professional engineer and that the dams were well-designed and sturdy enough to withstand the ravages of weather up to an extremely heavy storm without flooding.

The commission understood the potential pollution problems of coal ash, but ponds did flood on occasion in really bad storms and could overflow into nearby bodies of water, Creasy said.

"It was mainly a structural thing, although we understood why people were concerned about ash ponds," he said about the commission's primary focus. "The concern from an environmental perspective was that there might be some mercury or something else" in the ash.

McLawhorn of the public staff said he felt confident that any serious technical problems with the ash ponds would be caught in the backup review by the state's dam safety office, the group that Finley mentioned in his 2009 comments.

"When those reports were sent to the dam safety section of DENR, you were getting an independent set of eyes on them," McLawhorn said.

But only up to a certain extent and less so in more recent years, said Steve McEvoy , the state's chief dam safety engineer.

In 1982, when his office signed a formal agreement to help review the ash pond inspections, there were fewer demands on the dam-safety regulators and his staff had more time for such extras, McEvoy said.

His office didn't receive formal authority to regulate the ash ponds until four years ago. Before that, he said, the utilities commission "offered no resources to accommodate the extra workload for our staff."

"Therefore, our response to the review requests ... became less comprehensive over time."

Contact Taft Wireback at (336) 373-7100, and follow @TaftWireback on Twitter.

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