Dominion customers will foot the bill for multi-billion dollar coal ash clean-up

If you’re a Dominion customer (and most of Virginia is), you’ll be paying up to $5 more every month to help the company clean up the mess it made after spending decades dumping coal ash, the toxic by-product of burning coal, into sites that ultimately leaked into ground water.

If Democrats controlled the General Assembly, Dominion might be paying its own bills. But for now, this was the best compromise possible.

Some lawmakers “mainly on the left, felt like Dominion ought to pay for this because they’re the one’s who caused it,” said the bill’s champion, Sen. Scott Surovell (D-36), in an interview. “But to force Dominion to pay for something like this would be contrary to — probably — five decades of policy.” Virginia has always passed the costs of pollution control measures along to ratepayers, he said.

Last week, Gov. Ralph Northam signed a bill into law that forces Dominion Energy, Virginia’s biggest power company, to clean up the coal ash they stored in ponds across the Commonwealth. Dominion will lead the remediation projects, but its customers will foot the bill — the $5 per month per customer we mentioned above. And the charges will keep coming for nearly two decades.

Democrats floated the idea of making Dominion shareholders pay for the upgrades, but ultimately, sources said, that was not electorally possible.

“When Dominion pollutes, it should have skin in the clean-up game,” said Brennan Gilmore, executive director of Clean Virginia, an advocacy group. “Part of clean-up costs should come from Dominion’s shareholders, who benefited financially from this lack of environmental safeguards,” he said in an email. Keyword: “should.”

To be clear, just getting Dominion to clean up the sites is a huge victory for public health and the environment, Gilmore noted. Despite misgivings about funding the clean-up via customer’s pocketbooks, Gilmore said the law was ultimately a “comprehensive resolution of the problem of Dominion’s coal ash poisoning our waterways.”

Northam’s signature on the bill caps a years-long push by green groups to mandate the safe disposal or recycling of Virginia’s coal ash. The new law targets four Dominion Energy storage facilities located on or near the Chesapeake Bay Watershed. Collectively, these leaking, noxious mud pits hold 27 million cubic yards of toxic sludge, a nasty mixture of coal ash — the byproduct of coal-fired power plants — and water. For scale, that’s enough liquefied coal leftovers to fill over 8,000 Olympic-sized swimming pools.[

Despite years of dismissing concerns over leaking contaminants, Dominion’s own records showed in 2018 that its coal ash ponds are actively leaching pollutants into the environment.

Those results came as no surprise to Democrats, who heeded warnings from environmental groups and began pressing the issue in the General Assembly five years ago. Republicans, who routinely vote against pro-environmental legislation, were not so much an opponent in the coal ash cleanup fight as they were a drag on its progress.

It just took a perfect storm of alarming data, more than four years of lobbying from environmental groups, strong support from the Governor for a remedy, and revenue-neutral legislation to finally bring Dominion, which wields extraordinary political influence in Virginia, to the bargaining table.

The data that finally got Dominion to make a deal arrived this fall, according to Jamie Brunkow, senior advocacy manager of the James River Association.  It revealed high levels of toxins like arsenic and radium in groundwater near its coal ash ponds, which Brunkow said was “particularly concerning.” Those findings were critical in moving the coal ash bill from the environmental wishing well through the 2019 General Assembly session, where it passed by a vote of 38 -2 in the Senate.

Virginia Conservation Network, a coalition of Commonwealth green groups that led the charge for the cleanup bill, had been raising red flags around the issue for years.

“Because many of these facilities predate modern federal and state solid waste disposal safeguards, a large number of the coal ash waste sites are unlined and, in many cases, remain in direct contact with groundwater, creating serious pollution problems,” the group said in a 2019 report.

The argument that Dominion had never broken any rules because it dumped the coal ash before state and federal regulations were in place was a big reason why Dominion escaped footing the clean-up bill, Brunkow said.

“It’s because of those prior lackluster regulations that ratepayers, not Dominion, are getting slapped with the cost of clean-up. The argument that we heard from a lot of legislators was that Dominion had not broken any rules — the costs that are being passed on through the ratepayers is the cost of complying with [the new] environmental regulations.”

“If they had illegally discharged pollution into the river and broken a law then they would just be required to clean it up on their own dime,” Brunkow continued, “and that would be the end of the story.”

Instead, the legislation allows Dominion to recover up to $225 million per year from customers to pay for the recycling and safe disposal of its four coal ash ponds along the Chesapeake Bay Watershed. And to make things crazier, Gimore said, “Dominion may earn a significant profit off of coal-ash clean-up.”

That being said, it could have been worse for Virginians’ pocketbooks. Mary-Stuart Torbeck, a senior organizer for the Virginia Chapter of the Sierra Club, pointed to a 2014 coal ash spill in North Carolina, where a burst pipe at a Duke Energy storage site leaked 39,000 tons of coal ash and 27 million gallons of wastewater into the Dan River. To pay for the cleanup, the North Carolina Utilities Commission allowed Duke Energy to hike customers’ fixed monthly charges by 25 percent.

“Looking at other situations where coal ash has ended up in a clean-up situation — that would have most likely fallen onto either the ratepayers or the taxpayers and most likely would have been much more costly than paying for this up-front,” Torbeck said. She noted that the Sierra Club did not support punting the cleanup costs onto customers.

Duke Energy anticipates total cleanup costs for the Dan River spill will exceed $5 billion. If a similar spill had occurred in Virginia before this law was enacted, Dominion customers could be paying even more to safeguard Dominion’s ponds from future disaster.

Virginia’s coal ash cleanup bill is a “reminder that we can and should protect communities from environmental harms in the first place,” said Nate Benforado, an attorney for the Southern Environmental Law Center, in a statement.

Better late than never. Surovell, who sponsored the legislation, said the new coal ash law represents the first time that Virginia has adopted a more stringent standard of environmental compliance than what is required by the federal government.

Surovell said he would have preferred to charge Dominion for the cleanup, but that it was not “electorally possible.” But if a spill happens at one of the four coal ash ponds covered by this law, the customers will be protected from paying for future clean-ups.

The Sierra Club and other green groups will make their case for not charging customers before the State Corporation Commission, Virginia’s utility governing body, at a hearing in May. Those groups will also work to pass further coal ash reforms, like cleaning up Dominion’s other coal ash ponds in the 2020 General Assembly session. If Democrats take the House and Senate in Virginia’s 2019 elections, they have a much better shot.