trending Market Intelligence /marketintelligence/en/news-insights/trending/pHTk5KWHwpPdVr-pjNx6sQ2 content esgSubNav
In This List

Illinois lawmakers pass landmark coal ash cleanup bill

Blog

European Energy Insights - May 2021

Blog

Metals & Mining Insights May 2021

Blog

[Report]: 2021 Corporate Renewables Outlook

Blog

Corporate Credit Risk Trends in Developing Markets An Expected Credit Loss ECL Perspective


Illinois lawmakers pass landmark coal ash cleanup bill

The Illinois General Assembly on May 27 passed a bill that would require coal-fired power plant operators to set aside money for the cleanup of leaking coal ash impoundments targeted by federal regulations. The legislation is now headed to Illinois Gov. J.B. Pritzker's desk for signature.

Senate Bill 9, dubbed the Coal Ash Pollution Prevention Act, directs the Illinois Environmental Protection Agency to start a rulemaking process that requires power plant operators to safely dispose of coal ash or ensure that impoundments are properly enclosed. The state-run permitting program needs to be at least as protective as the U.S. Environmental Protection Agency's 2015 Coal Combustion Residuals, or CCR, rule, which established the first minimum federal standards for the safe handling and storage of coal ash produced by burning the fuel for electricity.

Among its many requirements, the CCR rule required power plant operators to conduct groundwater testing at coal ash storage sites and post the data to public-facing websites. Coal ash impoundments also known as ash ponds found to be leaking unsafe levels of pollutants such as arsenic, lead and mercury are required to initiate closure by October 2020. Closure can be performed by fully excavating the ash and transferring it dry landfills, capping the ash in place with a protective liner, or some combination of the two methods.

Illinois has the largest concentration of coal ash impoundments in the nation, according to data compiled by the environmental group Earthjustice. Nearly all of the state's coal ash impoundments 22 out of 24 with available data are leaking unsafe levels of at least one pollutant into nearby groundwater, according to a November 2018 report the group produced in cooperation with the Environmental Integrity Project using public CCR filings.

The lead sponsor for Senate Bill 9 was state Sen. Scott Bennett, a Democrat whose district includes the Vermilion Power Station formerly operated by Dynegy Midwest Generation Inc. Retired in 2011, the plant is now threatening to contaminate groundwater and the nearby Middle Fork of the Vermillion River, according to Bennett's office.

"Coal ash pollution is not a partisan issue," Bennett said in a statement. "There are coal ash pits in essentially every legislative district, so it's important to recognize that it's not a problem for one part of the state or one political party. It's a problem for the state of Illinois."

In addition to establishing a state-run coal ash cleanup program, Senate Bill 9 imposes fees on coal ash impoundments to pay for the costs of hiring Illinois Environmental Protection agency staff to oversee enforcement. The legislation would also require power plant operators to contribute to a "financial assurance fund" that can be tapped in the event a plant is shut down or a company goes bankrupt. Illinois has a deregulated power market, meaning generation owners cannot pass the cost of compliance with environmental regulations on to customers through rate case proceedings.

The bill would also establish a stakeholder process that allows the public to review companies' proposed closure plans. Furthermore, the bill would require companies to conduct multiple analyses that assess the costs and benefits of closing a site by fully excavating the ash versus capping it in place.

NRG Energy Inc. and Vistra Energy Corp., which completed its acquisition of Dynegy Midwest Generation in April 2018, operate nearly all of the coal ash storage sites in Illinois.

NRG spokesman David Knox said the company is still reviewing the legislation. "There is expected to be a trailer bill developed this summer in anticipation of the veto session to address outstanding items raised during the deliberation about the bill," he said in an email. "As always, we intend to comply with all applicable rules and regulations.​"

Vistra Energy did not respond to a request for comment.