The Illinois General Assembly has passed the Coal Ash Pollution Prevention Act.  Once it is signed into law by Governor Pritzker, Illinois will become the latest state to address a legacy of coal power generation with targeted legislation.  The impacts of the law – financial, environmental and operational – could be immense.  The most significant details, however, are being left to an upcoming administrative rulemaking process.  The Illinois EPA and the Illinois Pollution Control Board are now positioned to shape the State’s coal ash policy.  Their decisions will determine the fate of the State’s ash impoundments and the lengths power plant owners will have to go to fully close their facilities after retirement — and will have billions of dollars of implications.

What’s Missing?

The most glaring absence from the Act is clear direction on how each coal plant will have to close and secure its active impoundments.  The law requires submission of a closure alternatives analysis, and that analysis must assess the complete removal of ash from the impoundment, in addition to “all closure methods being considered.” The Illinois EPA, however, will ultimately have discretion whether to order complete removal of all ash or something less, such as dewatering and capping all remaining ash in place.

The significance of the closure method decision – economically as well as environmentally – is hard to overstate.  Illinois is putting itself on a path that could mirror the ongoing process in North Carolina, where the legislature first passed the Coal Ash Management Act (“CAMA”) in 2014.  Like the Coal Ash Pollution Prevention Act, CAMA delegated the closure method decision for some sites to environmental regulators.  North Carolina DEQ recently ordered complete excavation at all sites over which it had that jurisdiction.  Duke Energy, which owns the plants, is claiming that excavating all of the coal ash from certain sites will be more than 500% more expensive than capping the ash in place, and that as a result the total costs at some individual plants will exceed a billion dollars.

What Comes Next?

Delegating such substantial authority to Illinois EPA also sets up future court battles that could drag on for years.  Duke has already begun the process of challenging North Carolina DEQ’s basin excavation orders.

The Act also puts the Illinois EPA in the position to decide how much coal plant owners will pay in the short term.  The law mandates that plant owners post a performance bond or equivalent security sufficient to ensure the closure of all impoundments, to cover post closure care, and to fund any necessary environmental remediation.  These financial instruments will not come cheap, but just how expensive they will be will depend on how much financial assurance the Illinois EPA requires.  Regardless, those costs are likely to be far greater than the relatively small ash impoundment fees imposed by the Act ($75,000 initially for each operating impoundment, and another $25,000 per year).

The upcoming Illinois Pollution Control Board coal ash rulemaking therefore will go a long way to determining Illinois’ coal ash policy.  There is a possibility of additional legislation to modify or clarify parts of the Act, but that is not certain, and any additional legislation is likely to focus on financial assurance issues.  As it stands now, the Act instructs the Illinois EPA to propose rules within eight months of its effective date, and the Board to adopt final rules within the year after that.  The regulations the Illinois EPA proposes and the Board adopts not only will indicate how aggressive the Agency is likely to be in the future, but also will dictate how difficult it will be to challenge its decisions in court.  We will be keeping an eye on that process at Environmental Law Next and posting updates on significant developments.  Feel free to contact us if you have any questions or comments about our post.