Coal-Ash Recyclers Seen Aided in EPA’s Water-Discharge Plan

Headwaters Inc. (HW) and other companies that recycle waste from coal-fired power plants may benefit from less-restrictive rules that U.S. regulators have signaled they may adopt.

In proposing rules covering the waste power plants send into waterways, the Environmental Protection Agency said it may regulate coal ash as “non-hazardous municipal and solid waste,” rather than as the more serious “hazardous substance.” The possibility of the more serious categorization being invoked had depressed the ash-recycling business, and risked undermining the industry, the companies had warned.

“We applaud EPA’s announcement that the evidence the agency has collected shows coal ash does not warrant regulation as a hazardous waste,” Kirk Benson, chief executive officer of South Jordan, Utah-based Headwaters, the largest seller of products made from coal ash, said today in a statement. “This indication by EPA will help restore certainty to the beneficial use market and makes environmental and economic sense.”

The EPA’s proposal April 20 for regulating the water discharge from steam-electric power plants covers primarily coal and nuclear facilities, which that account for half the toxic pollutants in U.S. water bodies.

Regulators proposed a range of options. Costs to comply with the rules range from $185 million to $954 million, agency economists estimated. The more expensive options would target more units and more sources of waste, resulting in greater pollution reduction, it said.

Holding Ponds

Because some coal-fired power plants mix the ash with water and store it in ponds, the effluent limitations will affect how the agency regulates coal ash. According to the EPA, its proposal curbing water discharges from power plants would prod many utilities to switch to so-called dry handling of coal ash, thus curbing or eliminating the use of the ash ponds. Those ash ponds can rupture or leak.

“The agency preference may be for folks to switch to dry- handling procedures, and so kill two birds with one stone,” Daniel Deeb, a partner at the law firm Schiff Hardin and former director of the National Wildlife Federation environmental group, said in an interview. “This is a very significant proposal for the agency to make.”

The EPA had proposed two approaches for such rules in 2010, including labeling it hazardous, which would add stricter standards for plant owners. Republicans in Congress and groups lobbying for companies such as Headwaters pressed the agency to abandon that approach.

Page 52

On page 52 of the almost 500 pages of effluent rules, the agency said its “current thinking” is that coal ash could be adequately regulated without the hazardous label.

“With this announcement, EPA has sent a positive message to recycling markets that the agency’s earlier proposal to regulate coal ash as a hazardous waste was ill-conceived, unwarranted and ultimately unnecessary,” John Ward, the head of government relations for the American Coal Ash Association, said today in a blog post. “What coal ash recyclers need next from Washington is regulatory certainty, which means statements of what will happen rather than what might happen.”

Ward’s group represents companies such as power producers XCel Energy Inc. (XEL) and cement-maker Holcim Ltd. (HOLN)

TVA Spill

Environmental groups, citing a spill of 1 billion gallons of toxic waste by the Tennessee Valley Authority in 2008, argue that tighter regulation is overdue, and have pressed for the hazardous designation, citing the pollutants it can contain and the risks of further spills.

The EPA hasn’t said when the final rule for coal ash will be adopted, and environmental groups have sued the agency to force the decision. If EPA issues tough rules under the effluent guidelines, it can ease off on the coal-ash requirements, said Abigail Dillen, a lawyer for Earthjustice, which has sued the EPA to issue the rules.

“Until we see where EPA is going, it’s hard to evaluate” the mix of proposals, she said in an interview.

The new water-discharges regulations will add to measures on coal-fired generators issued since President Barack Obama took office in 2009. The administration’s most-expensive rule would cut mercury and other toxic air emissions from such plants. The April 20 measure would prevent similar minerals, arsenic and mercury, in water releases from the plants.

Coal is under mounting pressure from cheap natural gas, tougher federal pollution standards and state-level energy efficiency requirements. The Sierra Club’s coal campaign in early March said more than 142 plants has been closed. American Electric Power (AEP) Co. in February said it would shut three plants.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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