Community group takes the lead in pushing CSB recommendations forward

Back in 2011, the Chemical Safety Board recommended (after the 2008 Bayer CropScience explosion) the creation of a Hazardous Chemical Release Prevention Program for the Kanawha Valley. This program would be modeled after a highly successful program in Contra Costa County, CA. Even the January 9th Freedom leak was not enough to get serious movement on this recommendation, other than a brief reference in SB 373 that the Public Water System Supply Study Commission “review and consider” it as part of their charge.

Fortunately, People Concerned About Chemical Safety, an organization with a long history of advocating for chemical safety in the Kanawha Valley, is not waiting around any longer for the state government to act. They are convening the necessary stakeholders to try to make this happen. From a press release issued yesterday:

Between now and June 2015, the Roadmap Planning Team will meet monthly to outline what a Chemical Release Prevention Program should look like for the Kanawha Valley. The team will identify national best practices and garner public input among stakeholder groups in the development of an implementation roadmap.

Representatives ranging from public health, emergency response, occupational safety, labor, industry, impacted citizen and innovation have all been invited to participate. “Since the recommendation was originally made as a result of the 2008 Bayer CropScience incident and reiterated after the 2010 DuPont incident, we reached out to them to lead industry interest in the process. We’re still waiting on a few RSVPs, and optimistic that we will have a broad representation of interest at the table which is exciting,” says Nye. “We all have a common interest in preventing chemical disasters in our valley.”

The first meeting of PCACS’ Chemical Release Prevention Roadmap Planning Team will be held on Friday, October 24th from 10:00am to noon and is open to the public. The meeting will be held at the Kanawha-Charleston Health Department on Lee Street in Charleston in the 1st floor conference room. Public comment will be taken at the end of the meeting, though many opportunities to provide input will exist between now and June. For more information, contact People Concerned About Chemical Safety’s Executive Director, Maya Nye, at 304-389-6859 or maya@chemsafety.org.

Talking points on DEP’s draft aboveground storage tank rule

Comments on the DEP’s aboveground storage tank rule are due Friday, Oct 24th to WVDEPtankrules@wv.gov or by mail to:
West Virginia Department of Environmental Protection – Public Information Office
AST Emergency Rule Comments
601 57th Street SE
Charleston, WV 25304

Below are some talking points about the draft rule, provided by the WV Rivers Coalition:

1. We appreciate the expanded public input process on the aboveground storage tank (AST) rule.
2. We can support a risk-based approach to AST regulations that adequately protects human health and the environment.

  • No blanket industry exclusions.
  • Level 2 ASTs pose a risk and should be strongly regulated under the AST Act.
  • ASTs containing “food-grade” fracking materials should not be classified as Level 3.

 
3. The rule should apply to the entire AST system, including pipes and dispensing systems.
4. The AST registry should be accessible to the public.
5. The AST program should be adequately funded and staffed through AST registration fees.
6. Modify the rule to allow site-specific conditions in the AST certificate to operate, and provide opportunity for public notice and comment.
7. We support the rule’s:

  • Additional siting requirements for ASTs located within zones of critical concern or on karst topography, and ASTs that pose a threat to public health or the environment;
  • Detailed operation and maintenance requirements;
  • Requirement for Spill Prevention Response Plans to be submitted to DEP and made part of the public record;
  • Detailed requirements for corrective actions in response to confirmed or threatened releases;
  • Detailed requirements for AST design, construction and installation;
  • Detailed requirements for corrosion and deterioration prevention;
  • Detailed requirements for release prevention, leak detection and secondary containment – however, secondary containment deficiencies should be required to be corrected immediately.
  • Detailed requirements for nonoperational, change in service and closures of AST system; and
  • Delivery prohibitions for ASTs not in compliance.

 
8. Significantly increase the bond amounts so that they cover the potential liability that would be incurred if the AST fails. Under the current draft, the bond amount for the Freedom Industries’ 48,000-gallon MCHM tank would have been $9,600 – nowhere near the millions of dollars required to fully remediate the site and to compensate the people and businesses left without clean drinking water.

Comments on DEP draft rules due Friday

Earlier this month, DEP released an additional section of its draft aboveground storage tank rule. It looks like DEP is repeating one of the mistakes of its strip mining regulatory program.

The new section of the draft provides rules for how much money companies with aboveground storage tanks have to post as a bond to show that they have the money available to clean up a potential spill from their tank. The draft states,

13.1.c. Owners or operators shall demonstrate financial responsibility in an
amount calculated as follows:
13.1.c.1. For Level 1 ASTs, an amount equal to twenty cents per gallon
(20¢/gal.) of the aggregate storage capacity for the tank or tank facility, at a minimum of five
thousand dollars ($5,000).
13.1.c.2. For Level 2 ASTs, an amount equal to ten cents per gallon
(10¢/gal.) of the aggregate storage capacity for the tank or tank facility, at a minimum of five
thousand dollars ($5,000).

Recall that Level 1 ASTs are those, like the Freedom tanks, located in a sensitive area (such as the zone of critical concern of a drinking water intake); containing hazardous chemicals; and/or larger than 50,000 gallons. If this rule had been in place before the Freedom spill, the bond for the 48,000 gallon tank of MCHM/PPH would have been $9,600.

The Gazette noted back in June that the firm contracted by Freedom to do the clean up was asking for $315,000. The full cost to remediate the site is still unknown.

It’s clear that the DEP is once again allowing industry to get away with bonds that far underestimate the actual cost to remediate a spill, especially in situations where a hazardous chemical is involved. It seems bizarre that DEP would base the bond amount solely on the volume of chemical stored and not also on its toxicity. Remediating a toxic chemical spill is clearly going to be more expensive than dealing with a non-toxic chemical spill.

The DEP has faced a similar problem in its attempts to remediate strip mines. As stated in a 2012 Gazette article, DEP’s Special Reclamation Fund “has been short of money because coal operators had not posted reclamation bonds sufficient to cover the true cost of mine cleanups at sites that are abandoned. A state tax on coal production was never set high enough to make up the difference.”

Comments on the draft aboveground storage tank rule are due Friday to WVDEPtankrules@wv.gov or by mail them to:
West Virginia Department of Environmental Protection – Public Information Office
AST Emergency Rule Comments
601 57th Street SE
Charleston, WV 25304

A vicious cycle

We learned this past week that WV American Water used to have a gas chromatograph (the equipment used by Cincinnati and other water utilities to monitor for contaminants upstream of their intake) and other chemical testing equipment at their Kanawha Valley plant, but got rid of it in 2004. This is part of a broader focus on cost-cutting by the company – which is reflected in their high and growing unaccounted for water (leakage) rate, and their attempt to cut 10% of their staff back in 2011.

It is tempting to lump these activities under the general corporate management trend over the past 30-40 years of aggressively cutting costs and eliminating redundancies, but there is a more specific dynamic at work here. WV American Water is facing a declining market. Its overall sales have been on a declining trajectory since the late 1990s, and industrial sales have declined 60% since 1991. Because so much of a water utility’s rates go to cover the cost of infrastructure that has already been built, then when sales decline the utility has to raise rates on the remaining customers to be able to cover those costs.

The Public Service Commission has tried to hold WV American Water’s rate increases in check, but this means that the company has not been able to earn much of a profit on its WV operations. WV American Water’s return on equity (the return that shareholders get for investments in WV) has hovered in the range of 4%-5.5% for the past 5 years (see p. 116 here). Utility returns on equity are more typically in the 9-10% range. Because WV American is owned by a holding company, American Water Works, that owns water utilities across the country, the WV subsidiary is essentially in competition with the other subsidiaries for investment by the parent holding company. As stated by former WV American Water president Wayne Morgan in a 2010 rate case, “Why would American Water – or any company for that matter – invest in West Virginia when it can earn much more in Pennsylvania or New Jersey?”

The Public Service Commission’s attempts to keep a lid on WV American Water’s rate increases have almost certainly played a role in the company’s decisions to cut corners on operations & maintenance. This regulatory history also probably makes the utility vary wary of making any new infrastructure investments on its own (a second intake, for example) for fear that the PSC will not let them raise rates enough to cover it.

The underlying reality of gradual economic decline doesn’t appear to be going away any time soon. That means its time for some new thinking here – this vicious cycle of rising rates and under-investment in infrastructure hasn’t worked for us in the recent past, and it’s not going to work in the future.

What are our candidates planning to do about the water?

The election is less than one month away.  There are several candidate forums happening in the next few weeks (here and here, for examples).  If you’re going to any of these events, here are some important questions to ask:

1. What changes do you think need to be made to Senate Bill 373?
Several legislators, led by House Speaker Tim Miley, are already calling for more exemptions to be inserted into SB 373.  Their call earlier this year for a special session to make changes to Senate Bill 373 was unsuccessful, but it is likely that SB 373 will be under attack during the 2015 legislative session starting in January. We need to know which candidates will be champions in defending the bill.

2. Do you support increased funding for the Department of Environmental Protection to increase its capacity for inspections and enforcement of SB 373 and other laws?
Legislators like to complain that there is no money for anything, but this lack of money is at least partially their fault. As we posted previously, corporate tax cuts since 2006 are a major contributor to our state’s current budget shortfall.

Failure to enforce existing regulation was a key factor in this year’s water crisis.  We can pass all the new regulations we want, but unless we have the capacity to enforce them, we won’t get very far.  We need legislators that are willing to restore funding so that state agencies actually have resources to protect our state.

3. Would you support or sponsor legislation to implement a Hazardous Chemical Release Prevention Program, as recommended by the US Chemical Safety Board?
In 2011, the US Chemical Safety Board recommended the adoption of a Hazardous Chemical Release Prevention Program, modeled after a successful program in Contra Costa County, CA.  The only place where the Chemical Safety Board appears in SB 373 is the requirement that the Public Water System Supply Study Commission review and consider their recommendation.  The Chemical Safety Board’s recommendation is already more than 3 years old, and the legislature has yet to take any action that would suggest that they plan to implement it any time soon.

SB 373′s water system study commission finally gets started

The Public Water System Supply Study Commission established by Senate Bill 373 met for the first time last week. The Commission is charged with:

(1) A review and assessment of the effectiveness and the quality of information contained in updated source water protection plans required for certain public water systems by the provisions of section nine-c, article one, chapter sixteen of this code;
(2) A review and assessment of the effectiveness of legislation enacted during the 2014 Regular Session of the West Virginia Legislature, as it pertains to assisting public water systems in identifying and reacting or responding to identified potential sources of significant contamination, and increasing public awareness and public participation in the emergency planning and response process;
(3) The extent of available financing and funding alternatives which are available to existing public water systems to pursue projects which are designed to create alternate sources of supply or increased stability of supply in the event of a spill, release or contamination event which impairs the water system’s primary source of supply;
(4) A review and consideration of the recommendations of the U. S. Chemical Safety and Hazard and Investigation Board after its investigation of the Bayer CropScience incident of 2008; and
(5) Any recommendations or suggestions the study commission may offer to improve the infrastructure of existing public water systems, to provide safe and reliable sources of supplies, and to pursue other measures designed to protect the integrity of public water service.

 
The Commission has set up working groups to address each of these 5 subjects; the membership of the working groups is available on the Committee’s website.

There are already several organizations and people that are very knowledgeable about the issues that the Commission will study. People Concerned About Chemical Safety, for example, has long advocated for the adoption of the Chemical Safety Board’s recommended Hazardous Chemical Release Prevention Program; the West Virginia Rivers Coalition and Downstream Strategies are experts in source water protection; and Fred Stottlemyer (former director of the Putnam PSD) and Joe Mullins have released a proposal for a public-private partnership to create an alternate source of water supply for the Kanawha Valley. Hopefully the Commission will take full advantage of the available local expertise.

The meetings of the Commission are open to the public. The working groups are not covered by the state’s Open Meetings Act and thus there is no requirement that they be public – although there is no reason that they shouldn’t be. The next full commission meeting is October 27th, 2014 at 10 a.m. in the Governor’s Conference Room.

The members of the Commission are: Jimmy Gianato (Director of Division of Homeland Security and Emergency Management; Commission chair); Mike Albert (Public Service Commission); Tim Ball (general manager of the Morgantown Utility Board); Letitia Tierney (Commissioner of the Bureau for Public Health); Randy Huffman (Secretary of the Department of Environmental Protection); Nancy Guthrie (Kanawha County Delegate); Rahul Gupta (Director of Kanawha-Charleston Health Department); Mike McCawley (WVU professor of public health); Rick Roberts (engineer from E.L. Robinson Engineering); Ed Watson (hydrologist from Canaan Valley Institute); Pam Nixon (citizen representative); and Amy Swann (Rural Water Association).

WV American Water violates PSC order and continues to “keep the public in the dark”

Two motions were filed at the Public Service Commission today in the ongoing battle over WV American Water’s lack of transparency.

As you may recall, WV American Water had initially refused to answer many of the questions that parties in the investigation had asked in seeking to bring to light more details about the water utility’s response to the Freedom spill. The Commission ultimately held a hearing on the dispute and ordered WV American Water to disclose much of the information that it had been withholding. The Commission noted that some information might be sensitive (for example, relating to assessing water system vulnerability) and therefore the utility could file this information as confidential with the Commission and the parties; the Commission would rule later on whether such information should be publicly disclosed.

In violation of this order, WV American Water chose to file some information with the Commissioners only and not with any of the parties in the case. The parties (the Consumer Advocate Division, the PSC’s Staff, the WV Sustainable Business Council, and Advocates for a Safe Water System) filed a joint motion today asking the Commission to order the company to make this information available to the parties. They noted that WV American Water’s decision to share information with only the Commission was effectively an “ex parte communication” – a communication between a judge and one of the parties to a case that is not part of the formal evidentiary record in the case.

In addition, Advocates for a Safe Water System and the WV Sustainable Business Council argued in a separate motion filed today that much of the confidential information that the company did provide to the parties didn’t really need to be confidential. Advocates and the Business Council stated that “[t]he Company’s gross over-use of the ‘confidential’ designation … keeps the public in the dark regarding matters of legitimate public concern.” They also argued that WV American Water had attempted a “bait and switch” – even though it had emphasized homeland security concerns in its previous refusals to disclose information before and at the August hearing, the company is now saying that these documents are “trade secrets”, not posing any homeland security risk. The motion states:

While there may be aspects of the operation of even a water utility which involve competitive markets, it seems tremendously cavalier to imply that virtually all of its operations are somehow the subject of a closely guarded trade secret. In the case at hand there is no credible showing that anything that the Company seeks to hide would, if disclosed, give unwarranted business advantage to its competitors. Indeed, there is nothing that would even suggest this.

 
It is not clear that this issue is going to be resolved any time soon. Both of motions filed today are asking the Commission to take action: to order the company to provide more information to the parties, and to rule that some of the confidential information should be disclosed. But, as the PSC’s General Counsel recently pointed out, “[i]n order to constitute an action of the Commission, the concurrent judgment of two Commissioners is required… Consequently, until another Commissioner is appointed, the Commission is unable to rule.”

Who will the governor appoint?

Comments due Oct 24th on DEP’s draft tank rule

The DEP released its draft rule to regulate aboveground storage tanks under SB 373. The final version of the rule will likely be released in December, before the 2015 legislative session. According to DEP’s website:

Members of industry groups, environmental groups and other members of the public who asked to be identified as stakeholders in the rulemaking process earlier this year are invited to a working meeting on Oct. 1 to discuss the draft rule and ways to enhance its effectiveness.

Any other members of the public who would like to offer suggestions on ways to improve the rule can email those comments, by Oct. 24, 2014, to
WVDEPtankrules@wv.gov or mail them to:
West Virginia Department of Environmental Protection – Public Information Office
AST Emergency Rule Comments
601 57th Street SE
Charleston, WV 25304

 
SB 373 left many of the details of the regulatory program for aboveground storage tanks up to the DEP, and this rule explains how the DEP plans to regulate them. As the DEP indicated a couple weeks ago, it has decided to divide tanks into three categories based on their potential to contaminate waterways and harm the public. The DEP does not appear to have added any major new exemptions to the tank rules, but it will exempt Level 3 tanks (the lowest risk tanks) that are already covered by federal hazardous waste regulations.

The draft rules do not contain much detail on the financial aspects of the rule. The DEP did not provide any more details about how penalties will be assessed for violating the rule (SB 373 sets maximum penalty amounts, but not minimums). And the last section of the draft rule, “Financial Responsibility Requirements for ASTs [aboveground storage tanks]” is left blank.

We will provide a more detailed analysis of the rules in the coming weeks.

Bankruptcy judge supports $2.9 million settlement to benefit impacted community

Bill posted a few weeks ago on WV American Water’s opposition to a proposed settlement that would give $2.9 million back to the community. The $2.9 million would come from Freedom’s insurance money but, because Freedom is in bankruptcy and its insurance money is an asset of the company, any settlement making use of this money must first be approved by Freedom’s bankruptcy judge. WV American Water had urged the bankruptcy judge to reject the proposed settlement so that it might be able to get access to the insurance money through the bankruptcy case.

The Gazette today announced that bankruptcy judge Pearson has approved the settlement.

CDC visits West Virginia, but no medical monitoring yet

The Gazette had a couple articles last week (here and here) on the failure to come up with an adequate medical monitoring program for the population impacted by the Freedom spill.

In July, the Gazette reported that CDC had promised to “send a team to West Virginia within the next two months to help state officials determine what sorts of long-term health monitoring is needed for residents exposed to leaked chemicals,” according to the Gazette. The CDC did not promise any funding for monitoring.

The CDC team came to WV this past week and, according to a press release from the Department of Health and Human Resources (DHHR), “has committed to partnering with DHHR to develop plans that will allow the state to monitor a number of health outcomes over a long-term period. While this will not be directed toward the specific population involved in the chemical spill, it will allow health officials to closely monitor any significant changes or “spikes” in health care indicators. The monitoring is not on an individual level or even a specific event level, but it will closely monitor the overall health indicators in the state.”

This language is pretty vague, but it’s quite clear that the CDC and DHHR are not planning any medical monitoring program to track individuals exposed to crude MCHM and PPH.

This failure to come up with an adequate plan for medical monitoring seems to be at least as much a failure of the state government as the CDC. Although the Gazette article points out that SB 373 requires DHHR to “endeavor to engage” the CDC in health studies, the legislature never bothered to provide any funding for health studies. (Where did the money go?) Given that the WV government itself hasn’t ever demonstrated that it thinks medical monitoring is a priority, and given that the Tomblin administration is attacking the federal government left and right on many other issues, perhaps it shouldn’t be a surprise that providing WV with federal assistance is not a huge priority.