DC Circuit Rules on Challenges to EPA’s 2015 Final Rule Governing Disposal of Coal Residuals Produced by Electric Companies and Independent Power Plants

On August 21, the U.S. Court of Appeals for the District of Columbia decided the “coal combustions residuals” case: Utility Solid Waste Activities Group, et al. , v. EPA. This new Resource Conservation and Recovery Act (RCRA) case could have important implications for the coal industry and powerplants that use coal.

In April 2015, the Environmental Protection Agency (EPA) promulgated a final rule under its RCRA solid waste authority which regulates the management and disposal of coal combustion residuals generated in massive quantities by electric utilities and independent powerplants. The rules are located in EPA’s RCRA Subpart D non-hazardous solid waste rules. Early on, EPA made a critically important decision not to regulate these wastes under its much more rigorous Title C hazardous waste authority, and the bulk of the regulatory authority will be exercised by states implementing these new rules.

The Court of Appeals acknowledges the scope of the regulatory challenge faced by EPA in that these wastes have always been managed in massive disposal sites, primarily surface impoundments and landfills that are usually located adjacent to the generating sites. However, the Court of Appeals points to recent catastrophic failures of surface impoundments–some of which were located at virtually abandoned sites. The Court of Appeals ‘s opinion is embodied in a very long opinion (over 70 pages), and its decision agrees with most of the arguments made by the environmental petitioners, rejects and remands many determinations made by EPA, and essentially rejects all of the arguments made by industry petitioners in their challenge to these rules.

After cataloging the stark environmental and public health issues posed by the historic management of coal combustion residuals — the Court of Appeals notes, for instance, that in 2012, coal-fired power plants in the United States burned 800 million tons of coal, producing 110 million tons of solid waste which contain myriad carcinogens and neurotoxins — the court made a series of important rulings:

• EPA’s motion to hold these petitions in abeyance while it reviewed the impact of recent legislation was denied;
• agreed to remand to EPA the regulatory definition “coal residuals piles”, the 12,400 ton beneficial use threshold and alternative groundwater protection standards;
• denied EPA’s motion to remand the provisions in the final rule regarding inactive surface impoundments, landfills at active powerplants, and inactive surface impoundments at inactive powerplants;
• held that EPA’s failure to require the closure of unlined surface impoundments, classifying clay-lined impoundments as “lined”, and exempting from regulation inactive impoundments at inactive facilities were arbitrary and capricious and must be set aside; and
• held that, contrary to industry’s arguments, EPA has statutory authority to regulate inactive surface impoundments, and that EPA provided sufficient public notice of its intention to apply the aquifer location criteria to existing impoundments.

This is an important ruling, and may presage new challenges to EPA, powerplants and electric utilities and the states.