Financial Responsibility Requirements Under CERCLA Section 108(b) for Facilities in the Electric Power Generation, Transmission, and Distribution Industry, 36535-36552 [2019-15094]
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Federal Register / Vol. 84, No. 145 / Monday, July 29, 2019 / Proposed Rules
FOR FURTHER INFORMATION CONTACT:
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 300
[EPA–HQ–SFUND–1992–0007; FRL–9997–
22–Region 7]
National Oil and Hazardous
Substances Pollution Contingency
Plan; National Priorities List: Partial
Deletion of the Cleburn Street Well
Superfund Site
Environmental Protection
Agency (EPA).
ACTION: Proposed rule; notice of intent.
The Environmental Protection
Agency (EPA) Region 7 is issuing a
Notice of Intent to Delete Operable Unit
(OU)1 and OU4 of the Cleburn Street
Well Superfund Site (Site) located in
Grand Island, Nebraska from the
National Priorities List (NPL) and
requests public comments on this
proposed action. The NPL, promulgated
pursuant to section 105 of the
Comprehensive Environmental
Response, Compensation, and Liability
Act (CERCLA) of 1980, as amended, is
an appendix of the National Oil and
Hazardous Substances Pollution
Contingency Plan (NCP). The EPA and
the State of Nebraska through the
Nebraska Department of Environmental
Quality (NDEQ), have determined that
all appropriate response actions at these
identified media and/or parcels under
CERCLA, other than operations and
maintenance, have been completed.
However, this deletion does not
preclude future actions under
Superfund.
This partial deletion pertains to
OU1—Contaminated sub-surface soil at
the former One-Hour Martinizing and
OU4—Soil and Groundwater at Ideal
Cleaners. The remaining Operable
Units: OU2, OU3, and OU5 will remain
on the NPL and are not being
considered for deletion as part of this
action.
SUMMARY:
Comments must be received by
August 28, 2019.
ADDRESSES: Submit your comments,
identified by Docket ID no. EPA–HQ–
SFUND–1992–0007, by mail to David
Wennerstrom or Pam Houston,
Environmental Protection Agency,
Region 7, 11201 Renner Boulevard,
Lenexa, KS 66219. Comments may also
be submitted electronically or through
hand delivery/courier by following the
detailed instructions in the ADDRESSES
section of the direct final rule located in
the rules section of this Federal
Register.
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In the
‘‘Rules and Regulations’’ section of
today’s Federal Register, we are
publishing a direct final Notice of
Partial Deletion for Operable Unit (OU)1
and OU4 of the Cleburn Street Well
Superfund Site without prior Notice of
Intent for Partial Deletion because EPA
views this as a noncontroversial
revision and anticipates no adverse
comment. We have explained our
reasons for this partial deletion in the
preamble to the direct final Notice of
Partial Deletion, and those reasons are
incorporated herein. If we receive no
adverse comment(s) on this partial
deletion action, we will not take further
action on this Notice of Intent for Partial
Deletion. If we receive adverse
comment(s), we will withdraw the
direct final Notice of Partial Deletion
and it will not take effect. We will, as
appropriate, address all public
comments in a subsequent final Notice
of Partial Deletion based on this Notice
of Intent for Partial Deletion. We will
not institute a second comment period
on this Notice of Intent for Partial
Deletion. Any parties interested in
commenting must do so at this time.
For additional information, see the
direct final Notice of Partial Deletion
which is located in the Rules section of
this Federal Register.
SUPPLEMENTARY INFORMATION:
AGENCY:
DATES:
David Wennerstrom, Remedial Project
Manager, Environmental Protection
Agency, Region 7,11201 Renner
Boulevard, Lenexa, KS 66219, (913)
551–7996, email: wennerstrom.david@
epa.gov.
List of Subjects in 40 CFR Part 300
Environmental protection, Air
pollution control, Chemicals, Hazardous
substances, Hazardous waste,
Intergovernmental relations, Penalties,
Reporting and recordkeeping
requirements, Superfund, Water
pollution control, Water supply.
Authority: 33 U.S.C. 1321(d); 42 U.S.C.
9601–9657; E.O. 13626, 77 FR 56749, 3 CFR,
2013 Comp., p. 306; E.O. 12777, 56 FR 54757,
3 CFR, 1991 Comp., p. 351; E.O. 12580, 52
FR 2923, 3 CFR, 1987 Comp., p. 193.
Dated: July 17, 2019.
David Cozad,
Acting Regional Administrator, Region 7.
[FR Doc. 2019–15857 Filed 7–26–19; 8:45 am]
BILLING CODE 6560–50–P
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36535
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 320
[EPA–HQ–OLEM–2019–0085; FRL–9996–
47–OLEM]
RIN 2050–AH03
Financial Responsibility Requirements
Under CERCLA Section 108(b) for
Facilities in the Electric Power
Generation, Transmission, and
Distribution Industry
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
EPA (or the Agency) is
proposing to not impose financial
responsibility (FR) requirements for
facilities in the Electric Power
Generation, Transmission, and
Distribution industry under Section
108(b) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(CERCLA). Section 108(b) addresses the
promulgation of regulations that require
classes of facilities to establish and
maintain evidence of financial
responsibility consistent with the degree
and duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.
DATES: Comments must be received on
or before September 27, 2019.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
SFUND–2019–0085, at https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e., on the Web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
SUMMARY:
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For
more information on this document,
contact Charlotte Mooney, U.S.
Environmental Protection Agency,
Office of Resource Conservation and
Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC
20460; telephone (703) 308–7025 or
(email) mooney.charlotte@epa.gov.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
How can I get copies of this document
and other related information?
This Federal Register proposed rule
and supporting documentation are
available in a docket EPA has
established for this action under Docket
ID No. EPA–HQ–OLEM–2019–0085. All
documents in the docket are listed in
the https://www.regulations.gov index.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute.
Certain other material, such as
copyrighted material, will be publicly
available only in hard copy. Publicly
available docket materials are available
either electronically at https://
www.regulations.gov or in hard copy at
EPA/DC, WJC West, Room 3334, 1301
Constitution Ave. NW, Washington, DC
20460. This Docket Facility is open from
8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The
Docket Facility telephone number is
(202) 566–0276. The Public Reading
Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding
legal holidays. The telephone number
for the Public Reading Room is (202)
566–1744.
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Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
C. Summary of the Major Provisions of the
Regulatory Action
D. Costs and Benefits of the Regulatory
Action
II. Authority
III. Background Information
A. Overview of Section 108(b) and Other
CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of
Facilities for Development of CERCLA
Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice
of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent
To Proceed With Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed
Rule
VI. Electric Power Generation, Transmission
and Distribution Industry Overview
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A. Identification of Electric Power
Generation, Transmission and
Distribution Industry
B. Current Industry Practices
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and
Voluntary Protective Industry Practices
at Facilities in the Electric Power
Generation, Transmission and
Distribution Industry
C. Existing State and Federal Financial
Responsibility Programs
D. Compliance and Enforcement History
1. Relevant Industry-Specific Focused
Federal Enforcement Initiatives
2. Enforcement of Recent Electric Power
Generation, Transmission and
Distribution Industry Federal
Requirements
3. Review of Major CERCLA and RCRA
Cases
VIII. Decision To Not Propose Requirements
A. Solicitation of Public Comment on This
Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act
(UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
J. National Technology Transfer and
Advancement Act
K. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(CERCLA) directs EPA to develop
regulations that require classes of
facilities to establish and maintain
evidence of financial responsibility
consistent with the degree and duration
of risk associated with the production,
transportation, treatment, storage, or
disposal of hazardous substances. The
statute further requires that the level of
financial responsibility be established to
protect against the level of risk the
President, in his discretion, believes is
appropriate, based on factors including
the payment experience of the
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Hazardous Substance Superfund (Fund).
The President’s authority under this
section for non-transportation-related
facilities has been delegated to the EPA
Administrator.
In August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a lawsuit in
the U.S. Court of Appeals for the District
of Columbia Circuit, seeking a writ of
mandamus requiring issuance of
CERCLA Section 108(b) financial
responsibility rules for the hardrock
mining industry, and for the three
additional industries identified by EPA
in the 2010 Advance Notice of Proposed
Rulemaking (ANPRM),1 that is,
Chemical Manufacturing; Petroleum and
Coal Products Manufacturing; and
Electric Power Generation,
Transmission, and Distribution.
Following oral arguments, EPA and the
petitioners submitted a Joint Motion for
an Order on Consent, filed on August
31, 2015, which included a schedule for
further administrative proceedings
under CERCLA Section 108(b). The
court order granting the motion was
issued on January 29, 2016. A copy of
the order can be found in the docket for
this rulemaking.
In addition to requiring EPA to
publish a proposed rule on hardrock
mining financial requirements by
December 1, 2016, the January 2016
Order requires EPA to ‘‘sign for
publication in the Federal Register a
determination whether EPA will issue a
notice of proposed rulemaking on
financial assurance requirements under
Section 108(b) in the (a) chemical
manufacturing industry; (b) petroleum
and coal products manufacturing
industry; and (c) electric power
generation, transmission, and
distribution industry by December 1,
2016.’’ EPA signed the required
determination on December 1, 2016; the
document was published on January 11,
2017 2 and announced EPA’s intent to
proceed with rulemakings for all three
of the classes.
B. Purpose of This Action
The purpose of today’s action is to
propose that financial responsibility
requirements under CERCLA Section
108(b) at facilities in the Electric Power
Generation, Transmission, and
Distribution industry are not necessary,
and solicit comments on this proposal.
EPA has reached this conclusion based
on the analyses described in Parts VI
and VII of this proposal. The evidence
1 See
2 See
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provided in these analyses contributed
to EPA’s proposed finding that the
degree and duration of risk posed by the
Electric Power Generation,
Transmission and Distribution Industry
does not warrant financial responsibility
requirements under CERCLA Section
108(b).
The analysis and proposed finding in
this proposal are not applicable to and
do not affect, limit, or restrict EPA’s
authority to take a response action or
enforcement action under CERCLA at
any facility in the Electric Power
Generation, Transmission, and
Distribution Industry, including any
currently operating facilities or those
described in this proposal and in the
background documents for this
proposal, and to include requirements
for financial responsibility as part of
such response action. The set of facts in
the rulemaking record related to the
individual facilities discussed in this
proposed rulemaking support the
Agency’s proposal not to issue financial
responsibility requirements under
Section 108(b) for this class, but a
different set of facts could demonstrate
a need for a CERCLA response action at
an individual site. This proposed
rulemaking also does not affect the
Agency’s authority under other
authorities that may apply to individual
facilities, such as the Clean Air Act
(CAA), the Clean Water Act (CWA), the
Resource Conservation and Recovery
Act (RCRA), and the Toxic Substances
Control Act (TSCA).
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C. Summary of the Major Provisions of
the Regulatory Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Electric Power
Generation, Transmission, and
Distribution industry. Thus, there are no
proposed regulatory provisions
associated with this action.
D. Costs and Benefits of the Regulatory
Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Electric Power
Generation, Transmission, and
Distribution industry. EPA, therefore,
has not conducted a Regulatory Impact
Analysis for this action.
II. Authority
This proposed rule is issued under
the authority of Sections 101, 104, 108
and 115 of the Comprehensive
Environmental Response,
Compensation, and Liability Act of
1980, as amended, 42 U.S.C. 9601, 9604,
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9608 and 9615, and Executive Order
12580. (52 FR 2923, January 29, 1987).
III. Background Information
A. Overview of Section 108(b) and Other
CERCLA Provisions
CERCLA, as amended by the
Superfund Amendments and
Reauthorization Act of 1986 (SARA),
establishes a comprehensive
environmental response and cleanup
program. Generally, CERCLA authorizes
EPA 3 to undertake removal or remedial
actions in response to any release or
threatened release into the environment
of ‘‘hazardous substances’’ or, in some
circumstances, any other ‘‘pollutant or
contaminant.’’ As defined in CERCLA
Section 101, removal actions include
actions to ‘‘prevent, minimize, or
mitigate damage to the public health or
welfare or to the environment,’’ and
remedial actions are ‘‘actions consistent
with [a] permanent remedy[.]’’ Remedial
and removal actions are jointly referred
to as ‘‘response actions.’’ CERCLA
Section 111 authorizes the use of the
Hazardous Substance Superfund (Fund)
established under title 26, United States
Code, to finance response actions
undertaken by EPA. In addition,
CERCLA Section 106 gives EPA 4
authority to compel action by liable
parties in response to a release or
threatened release of a hazardous
substance that may pose an ‘‘imminent
and substantial endangerment’’ to
public health or welfare or the
environment.
CERCLA Section 107 imposes liability
for response costs on a variety of parties,
including certain past owners and
operators, current owners and operators,
and certain generators, arrangers, and
transporters of hazardous substances.
Such parties are liable for certain costs
and damages, including all costs of
removal or remedial action incurred by
the Federal Government, so long as the
costs incurred are ‘‘not inconsistent
with the national contingency plan,’’
(the National Oil and Hazardous
Substances Pollution Contingency Plan
or NCP).5 Section 107 also imposes
liability for natural resource damages
and health assessment costs.6
3 Although Congress conferred the authority for
administering CERCLA on the President, most of
that authority has since been delegated to EPA. See
Exec. Order No. 12580, 52 FR. 2923 (Jan. 23, 1987).
The executive order also delegates to other Federal
agencies specified CERCLA response authorities at
certain facilities under their ‘‘jurisdiction, custody
or control.’’
4 CERCLA Sections 106 and 122 authority is also
delegated to other Federal agencies in certain
circumstances. See Exec. Order No. 13016, 61 FR
45871 (Aug. 28, 1996).
5 See CERCLA Section 107 (a)(4)(A).
6 See CERCLA Section 107 (a)(4)(C)–(D).
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Section 108(b) establishes an
authority to require owners and
operators of classes of facilities to
establish and maintain evidence of
financial responsibility. Section
108(b)(1) directs EPA to develop
regulations requiring owners and
operators of facilities to establish
evidence of financial responsibility
‘‘consistent with the degree and
duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.’’ In turn, Section 108(b)(2)
directs that the level of financial
responsibility shall be initially
established, and, when necessary,
adjusted to protect against the level of
risk that EPA in its discretion believes
is appropriate based on the payment
experience of the Fund, commercial
insurers, courts settlements and
judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not,
however, preclude EPA from
considering other factors in addition to
those specifically listed. The statute
prohibited promulgation of such
regulations before December 1985.
In addition, Section 108(b)(1)
provides for publication within three
years of the date of enactment of
CERCLA of a ‘‘priority notice’’
identifying the classes of facilities for
which EPA would first develop
financial responsibility requirements. It
also directs that priority in the
development of requirements shall be
accorded to those classes of facilities,
owners, and operators that present the
highest level of risk of injury.
B. History of Section 108(b)
Rulemakings
1. 2009 Identification of Priority Classes
of Facilities for Development of
CERCLA Section 108(b) Financial
Responsibility Requirements
On March 11, 2008, Sierra Club, Great
Basin Resource Watch, Amigos Bravos,
and Idaho Conservation League filed a
suit against former EPA Administrator
Stephen Johnson and former Secretary
of the U.S. Department of
Transportation Mary E. Peters, in the
U.S. District Court for the Northern
District of California. Sierra Club, et al.
v. Johnson, No. 08–01409 (N.D. Cal.).
On February 25, 2009, that court
ordered EPA to publish the Priority
Notice required by CERCLA Section
108(b)(1) later that year. The 2009
Priority Notice and supporting
documentation presented the Agency’s
conclusion that hardrock mining
facilities would be the first class of
facilities for which EPA would issue
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CERCLA Section 108(b) requirements.7
Additionally, the 2009 Priority Notice
stated EPA’s view that classes of
facilities outside of the hardrock mining
industry may warrant the development
of financial responsibility
requirements.8 The Agency committed
to gather and analyze data on additional
classes of facilities and consider them
for possible regulation. The court later
dismissed the remaining claims.
2. Additional Classes 2010 Advance
Notice of Proposed Rulemaking
On January 6, 2010, EPA published an
Advance Notice of Proposed
Rulemaking (ANPRM),9 in which the
Agency identified three additional
industrial sectors for the development,
as necessary, of proposed Section 108(b)
regulation. To develop the list of
additional classes for the 2010 ANPRM,
EPA used information from the CERCLA
National Priorities List (NPL) and
analyzed data from the Resource
Conservation and Recovery Act (RCRA)
Biennial Report (BR) and the Toxics
Release Inventory (TRI). As was
discussed in the ANPRM, these sources
were chosen because ‘‘they are wellestablished, reliable sources of
information on facilities associated with
hazardous substances, and were readily
available to the Agency.’’ 10 As an
additional factor for consideration, EPA
looked at certain known cases where
impacts to groundwater or surface water
had been documented, as well as recent
catastrophic releases, such as the 2008
release of coal ash from the Tennessee
Valley Authority’s (TVA) Kingston
Plant. The result of this analysis is
explained in the 2010 ANPRM in detail,
with the conclusion that three
industries—the Chemical
Manufacturing industry (North
American Industry Classification
System (NAICS) 325), the Petroleum
and Coal Products Manufacturing
industry (NAICS 324), and the Electric
Power Generation, Transmission, and
Distribution industry (NAICS 2211)—
would be considered for financial
responsibility requirements under
§ 108(b).
EPA specifically requested public
comment in the 2010 ANPRM on
whether to propose a regulation under
CERCLA Section 108(b) for each of the
three industries, or any class or classes
within those industries, including
information demonstrating why such
financial responsibility requirements
would or would not be appropriate for
7 See
74 FR 37214 (July 28, 2009).
at 37218.
9 See 75 FR 816.
10 See 75 FR 819.
8 Id.
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those particular classes. In addition, the
Agency requested information related to
the industry categories discussed in the
ANPRM, including data on facility
operations, information on past and
expected future environmental response
actions, use of financial responsibility
mechanisms by the industry categories,
existing financial responsibility
requirements, and other information the
Agency might consider in setting
financial responsibility levels. Finally,
EPA requested information from the
insurance and the financial sectors
related to instrument availability and
implementation, and potential
instrument conditions.11 Comments
received on the ANPRM are
summarized in the Additional Classes
2017 Notice of Intent to Proceed with
Rulemakings, section III.B.4 below.
3. 2014 Petition for Writ of Mandamus
Dissatisfied with the pace of EPA’s
progress, in August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a new lawsuit
in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a
writ of mandamus requiring issuance of
CERCLA Section 108(b) financial
assurance rules for the hardrock mining
industry and for three other industries:
Chemical manufacturing; petroleum and
coal products manufacturing; and
electric power generation, transmission,
and distribution. Thirteen companies
and organizations representing business
interests in the hardrock mining and
other sectors sought to intervene in the
case.
Following oral argument, the court
issued an Order in May 2015 requiring
the parties to submit, among other
things, supplemental submissions
addressing a schedule for further
administrative proceedings under
CERCLA Section 108(b). The Order
further encouraged the parties to confer
regarding a schedule and, if possible, to
submit a jointly agreed upon proposal.
Petitioners and EPA were able to reach
agreement on a schedule. The parties
requested an Order from the court with
a schedule calling for the Agency to sign
a proposed rule for the hardrock mining
industry by December 1, 2016, and a
final rule by December 1, 2017. The
joint motion also included a requested
schedule for the additional industry
classes, which called for EPA to sign by
December 1, 2016, a determination on
whether EPA will issue a notice of
proposed rulemaking for classes of
facilities in any or all of the other
11 See
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industries, and a signature schedule for
proposed and final rules for the
additional industry classes as follows:
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the first additional industry by
July 2, 2019, and sign for publication in the
Federal Register a notice of its final action
by December 2, 2020.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the second additional industry
by December 4, 2019, and sign for
publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the third additional industry
by December 1, 2022, and sign for
publication in the Federal Register a notice
of its final action by December 4, 2024.12
While the joint motion identified the
other industries as being the Chemical
Manufacturing industry, the Petroleum
and Coal Products Manufacturing
industry, and the Electric Power
Generation, Transmission and
Distribution industry, and set a
rulemaking schedule, it did not indicate
which industry would be the first,
second or third. The Joint Motion
specified that it did not alter the
Agency’s discretion as provided by
CERCLA and administrative law.13
On January 29, 2016, the court
granted the joint motion and issued an
Order that mirrored the submitted
schedule in substance. The Order did
not mandate any specific outcome of the
rulemakings.14 The court Order can be
found in the docket for this rulemaking.
The signing of this proposed rule by
July 2, 2019, will satisfy one component
of the court Order. EPA has selected the
Electric Power Generation,
Transmission and Distribution industry
as the first additional industry to meet
the schedule laid out in the Order.
4. Additional Classes 2017 Notice of
Intent To Proceed With Rulemakings
Consistent with the January 2016
court Order, EPA signed on December 1,
2016, a determination regarding
rulemakings for the additional classes—
a Notice of Intent to Proceed with
12 In Re: Idaho Conservation League, No. 14–1149
(D.C. Cir. Jan. 29, 2016) (order granting joint
motion).
13 See Joint Motion at 6 (‘‘Nothing in this Joint
Motion should be construed to limit or modify the
discretion accorded EPA by CERCLA or the general
principles of administrative law.’’)
14 In granting the Joint Motion, the court
expressly stated that its Order ‘‘merely requires that
EPA conduct a rulemaking and then decide whether
to promulgate a new rule—the content of which is
not in any way dictated by the [Order].’’ In re Idaho
Conservation League, at 17 (quoting Defenders of
Wildlife v. Perciasepe, 714 F.3d 1317, 1324 (D.C.
Cir. 2013).
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Rulemakings for all three of the classes.
The document was published in the
Federal Register on January 11, 2017.15
The Notice of Intent to Proceed with
Rulemakings formally announced EPA’s
intention to move forward with the
regulatory process and publish a notice
of proposed rulemaking for classes of
facilities within the three industries
identified in the 2010 ANPRM. The
announcement in the Notice of Intent to
Proceed with Rulemakings was not a
determination that requirements were
necessary for any or all of the classes of
facilities within the three industries, or
that EPA would propose such
requirements. In addition, the document
gave an overview of some of the
comments received on the 2010 ANPRM
and initial responses to those
comments. The comments on the
ANPRM which specifically addressed
the need for CERCLA Section 108(b)
regulation for the three additional
classes fell into four categories: (1)
Other laws that the industry complies
with that obviate the need for CERCLA
Section 108(b) regulation; (2) the
sources of data EPA used to select the
industries; (3) past versus current
practices within each industry; and (4)
the overall need for financial
responsibility for each industry. In
discussing the ANPRM comments in the
2017 Notice of Intent to Proceed with
Rulemakings, the Agency stated its
intent to use other, more industryspecific and more current sources of
data to identify risk, and to consider site
factors that reduce risks, including those
that result from compliance with other
regulatory requirements, and develop a
regulatory proposal based on the record
EPA would develop for each
rulemaking.
At the time of the 2017 Notice of
Intent to Proceed with Rulemakings,
EPA had not identified sufficient
evidence to determine that the
rulemaking process was not warranted,
nor had EPA identified sufficient
evidence to establish CERCLA Section
108(b) requirements. The document
described a process to gather and
analyze additional information to
support the Agency’s ultimate decision,
including further evaluation of the
classes of facilities within the three
industry sectors. The Notice of Intent to
Proceed with Rulemakings stated that
EPA would decide whether proposal of
requirements was necessary and,
accordingly propose appropriate
requirements or propose not to impose
requirements.
15 See
82 FR 3512.
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IV. Statutory Interpretation
CERCLA Section 108(b) provides
general instructions on how to
determine what financial responsibility
requirements to impose for a particular
class of facility. Section 108(b)(1) directs
EPA to develop regulations requiring
owners and operators of facilities to
establish evidence of financial
responsibility ‘‘consistent with the
degree and duration of risk associated
with the production, transportation,
treatment, storage, or disposal of
hazardous substances.’’ Section
108(b)(2) directs that the ‘‘level of
financial responsibility shall be initially
established and, when necessary,
adjusted to protect against the level of
risk’’ that EPA ‘‘believes is appropriate
based on the payment experience of the
Fund, commercial insurers, courts
settlements and judgments, and
voluntary claims satisfaction.’’ Read
together, the statutory language on
determining the degree and duration of
risk and on setting the level of financial
responsibility confers a significant
amount of discretion on EPA.
Section 108(b)(1) directs EPA to
evaluate risk from a selected class of
facilities, but it does not suggest that a
precise calculation of risk is either
necessary or feasible. Although the risk
associated with a particular site can be
ascertained only once a response action
is required, any financial responsibility
requirements imposed under Section
108(b) would be imposed before any
such response action was identified.
The statute thus necessarily confers on
EPA wide latitude to determine, in a
Section 108(b) rulemaking proceeding,
what degree and duration of risk are
presented by the identified class.
Section 108(b)(2) in turn directs that
EPA establish the level of financial
responsibility that EPA in its discretion
believes is appropriate to protect against
the risk. This statutory direction does
not specify a methodology for the
evaluation. Rather, this decision is
committed to the discretion of the EPA
Administrator. While the statute
provides a list of information sources on
which EPA is to base its decision—the
payment experience of the Superfund,
commercial insurers, courts settlements
and judgments, and voluntary claims
satisfaction—the statute does not
indicate that this list of factors is
exclusive, nor does it specify how the
information from these sources is to be
used, such as by indicating how these
categories are to be weighted relative to
one another.
For the electric power industry, EPA
has investigated the payment history of
the Fund, and enforcement settlements
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and judgments, to evaluate, in the
context of this CERCLA Section 108(b)
rulemaking, the risk from facilities that
would be subject to CERCLA financial
responsibility requirements. The statute
also authorizes EPA to consider the
existence of Federal and state regulatory
requirements, including any financial
responsibility requirements. Section
108(b)(1) directs EPA to promulgate
financial responsibility requirements
‘‘in addition to those under subtitle C of
the Solid Waste Disposal Act and other
Federal law.’’ According to the 1980
Senate Report on legislation that was
later enacted as CERCLA, Congress
considered it appropriate for EPA to
examine those additional requirements
when evaluating the degree and
duration of risk under what was later
enacted as CERCLA Section 108(b):
The bill requires also that facilities
maintain evidence of financial responsibility
consistent with the degree and duration of
risks associated with the production,
transportation, treatment, storage, and
disposal of hazardous substances. These
requirements are in addition to the financial
responsibility requirements promulgated
under the authority of § 3004(6) of the Solid
Waste Disposal Act. It is not the intention of
the Committee that operators of facilities
covered by § 3004(6) of that Act be subject to
two financial responsibility requirements for
the same dangers.16
While the Senate Report mentions
RCRA Section 3004(6) specifically, it is
consistent with Congressional intent for
EPA to consider other potentially
duplicative federal financial
responsibility requirements when
examining the ‘‘degree and duration of
risk’’ in the context of CERCLA § 108(b)
to determine whether and what
financial responsibility requirements are
appropriate. It is also consistent with
Congressional intent for EPA to consider
state laws before imposing additional
Federal financial responsibility
requirements on facilities.
Consideration of state laws before
developing financial responsibility
regulations is consistent with CERCLA
Section 114(d), which prevents states
from imposing financial responsibility
requirements for liability for releases of
the same hazardous substances after a
facility is regulated under Section 108 of
CERCLA. Just as Congress clearly
intended to prevent states from
imposing duplicative financial
assurance requirements after EPA had
acted to impose such requirements
under Section 108, it is reasonable to
also conclude that Congress did not
mean for EPA to disrupt existing state
programs that are successfully
16 S.
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regulating industrial operations to
minimize risk, including the risk of
taxpayer liability for response actions
under CERCLA, and that specifically
include appropriate financial assurance
requirements under state law. Reviews
of both state programs and other federal
programs help to identify whether and
at what level there is current risk that
is appropriate to address under CERCLA
Section 108.
EPA also believes that, when
evaluating whether and at what level it
is appropriate to require evidence of
financial responsibility, EPA should
examine information on electric power
generation, transmission and
distribution facilities operating under
modern conditions, i.e., the type of
facilities to which financial
responsibility regulations would apply.
These modern conditions include state
and federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities. This reading of Section 108(b)
is consistent with statements in the
legislative history of the statute. The
1980 Senate Report states that the
legislative language that became Section
108(b) ‘‘requires those engaged in
businesses involving hazardous
substances to maintain evidence of
financial responsibility commensurate
with the risk which they present.’’ 17
This statutory interpretation is
reflected in this proposal. Any financial
responsibility requirements imposed
under Section 108(b) would apply to
currently operating facilities. EPA thus
sought to examine the extent to which
hazardous substance management at
currently operating electric power
generation, transmission and
distribution facilities as a class
continues to present risk. Moreover, the
statutory direction to identify
requirements consistent with identified
risks guides EPA’s interpretation that
imposition of financial responsibility
requirements under Section 108(b)
would not be necessary for currently
operating facilities that present minimal
current risk. The interpretation in this
proposal does not extend to any sitespecific determinations of risk made in
the context of individual CERCLA site
responses. Those decisions will
continue to be made in accordance with
preexisting procedures.
EPA thus examined records of
releases of hazardous substances from
facilities operating under a current
regulatory framework and data on the
actions taken and expenditures incurred
in response to such releases. The data
collected do not reflect historical
17 S.
Rept. 96–848 (2d Sess, 96th Cong.), at 92.
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practices, many of which would be
illegal under current environmental
laws and regulations. Instead, EPA has
considered current federal and state
regulation of hazardous substance
production, transportation, treatment,
storage, or disposal applicable to
facilities in the electric power industry.
V. Approach To Developing This
Proposed Rule
Based on the statutory interpretation
described above, EPA developed an
analytical approach to determine
whether the current risk under a
modern regulatory framework within
the Electric Power Generation,
Transmission and Distribution industry
rises to the level that warrants
imposition of financial responsibility
requirements under CERCLA Section
108(b). Specifically, EPA designed the
analytical approach to determine the
need for financial responsibility for this
industry based on the degree and
duration of risk associated with the
industry’s production, transportation,
treatment, storage, or disposal of
hazardous substances. The approach,
described in detail below, looks at risks
by examining records of releases of
hazardous substances from facilities in
the industry in combination with the
payment history of the Fund, and
enforcement settlements and judgments.
To enable EPA to base its decision on
risk posed by facilities operating under
modern conditions, i.e., the types of
facilities to which financial
responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices.
EPA sought to determine the level of
risk at current Electric Power
Generation, Transmission and
Distribution operations. Relevant to this
decision are requirements of existing
regulatory programs and voluntary
practices, including existing financial
responsibility requirements, which can
reduce costs to the taxpayer; EPA’s
experience with clean-ups in the
Electric Power Generation,
Transmission and Distribution industry;
and enforcement actions, which may
reduce the need for federally-financed
response action at facilities in the
Electric Power Generation,
Transmission and Distribution industry.
As part of scoping the Electric Power
Generation, Transmission and
Distribution industry for this proposal,
EPA sought to understand general
characteristics of the industry that may
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be relevant to financial responsibility
under Section 108(b). To do this EPA
compiled industry features, including
the types of activities undertaken and
wastes handled or produced.
Additionally, EPA looked at the
financial condition of the industry to
assess the ability of facilities in this
class to pay for any environmental
obligations they may incur. Discussion
of these aspects of the industry is
included in Section VI of this proposal.
Section VII.A. describes EPA’s
evaluation of cleanup cases at facilities
in the Electric Power Generation,
Transmission and Distribution industry.
So-called ‘‘cleanup cases’’ are sites in
the Electric Power Generation,
Transmission and Distribution industry
where releases and cleanup actions
occurred. To perform this evaluation
EPA developed an analytic approach
that considered cleanup cases to
identify risk at currently operating
facilities and where taxpayer funds were
expended for response action. EPA first
examined each site to determine the
nature and timing of release. EPA used
this information to determine if releases
occurred under current regulations. As
an initial screen, releases that occurred
prior to 1980 were deemed to be legacy
releases that occurred prior to the
advent of the modern environmental
regulatory framework and were
therefore screened out of our analysis.
Once EPA identified those sites with
more recent releases occurring under a
modern environmental regulatory
framework, EPA then focused on those
response actions that were paid for by
the taxpayer by looking at those sites
with Fund-financed cleanup activity.
As described in Section VII.B., to
understand the modern regulatory
framework applicable to currently
operating facilities within the Electric
Power Generation, Transmission and
Distribution industry, EPA compiled
applicable Federal and state regulations.
Specifically, EPA looked to regulations
that address the types of releases
identified in the cleanup cases. This
review also considered industry
voluntary programs that could reduce
risk of releases. EPA also identified
financial responsibility regulations that
apply to facilities in the Electric Power
Generation, Transmission and
Distribution industry, Section VII.C.,
and compliance and enforcement
history for the relevant regulations,
Section VII.D.
In considering how to structure its
analysis and what data sources to
examine, EPA looked at prior analysis
done for selection of industry classes in
the 2010 ANPRM and public comments
responding to EPA’s approach. In the
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public comment period for the ANPRM,
EPA received a total of 67 comments
from 30 commenters on the Chemical
Manufacturing industry, Petroleum and
Coal Products Manufacturing industry,
and the Electric Power Generation,
Transmission, and Distribution
industry. In addition, EPA received five
comments to the Hardrock Mining
Proposed Rule related to the additional
classes of facilities.
A large portion of the comments EPA
received on the ANPRM were related to
the Electric Power Generation,
Transmission and Distribution industry.
Commenters noted their view that this
industry is distinct from other
industries because it does not have a
history of failing to cover remediation
costs. Further, commenters stated that
facilities in this industry are subject to
multiple Federal environmental statutes
and regulations and thus EPA should
not duplicate existing financial
assurance. In addition, commenters
stated that EPA should focus on large
electric power generation facilities that
produce and release hazardous
substances, not transmission or
distribution facilities; wind, solar,
nuclear, or hydro-electric plants; or
natural gas-fired and oil-fired electric
generation facilities. Lastly, some
commenters believe that EPA placed too
much emphasis on Toxics Release
Inventory (TRI) data and RCRA Biennial
Report (BR) data and expressed their
opinions that these data sources are not
risk based.
In its 2017 Notice of Intent to Proceed
with Rulemakings 18 EPA acknowledged
limitations on information that can be
gained from TRI and BR data and
announced its intention to use industryspecific and current sources of data to
identify risk for the purposes of the
rulemakings. In the analysis conducted
to assess risk in the Electric Power
Generation, Transmission and
Distribution industry for this action,
EPA chose not to rely on TRI and BR
data. While the Agency found those data
sources appropriate for identifying
classes of facilities to examine further at
the time of the 2010 ANPRM, it did not
find them valuable for assessing current
risk in the industry or the need for a
response action.
18 See
82 FR 3512.
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V. Electric Power Generation,
Transmission and Distribution Industry
Overview
A. Identification of Electric Power
Generation, Transmission and
Distribution Industry
For this proposal and the associated
analyses, EPA reviewed facilities
classified under the North American
Industry Classification System (NAICS)
code 2211. Most recently available
census data lists the size of the industry
at 10,330 establishments nationally.19
The Electric Power Generation,
Transmission and Distribution (NAICS
2211) industry is defined as: Facilities
primarily engaged in generating,
transmitting, and distributing electric
power. Establishments 20 in this
industry group may perform one or
more of the following activities: (1)
Generate electric energy; (2) operate
transmission systems that convey the
electricity from the generation facility to
the distribution system; and (3) operate
distribution systems that convey electric
power received from the generation
facility or the transmission system to the
final consumer.
B. Current Industry Practices
Operational and decommissioning
practices in industrial sectors and their
associated firms can ultimately affect
the ability of individual firms to
responsibly minimize their impact on
human health and the environment. To
consider the potential for releases as
part of its decision making, EPA
prepared a high-level review 21 of
industry practices and the
environmental profile of the Electric
Power Generation, Transmission and
Distribution industry, which includes a
summary of relevant operational and
decommissioning materials and wastes.
Electric generating plants convert
mechanical, chemical, and/or fission
energy into electric energy. Within this
population of electric generating plants,
there are different types of processes
employed to produce electricity (e.g.,
coal-fired power plants, wind turbines).
Electric power transmission is the bulk
transfer of electrical energy between the
point of generation and multiple
substations near a populated area or
19 United States Census Bureau, EC1222A1—
Utilities: Geographic Area Series: Summary
Statistics for the U.S., States, Metro Areas, Counties,
and Places, 2012.
20 Establishment is defined as a single physical
location where business is conducted or where
services or industrial operations are performed.
www.census.gov/ces/dataproducts/bds/
definitions.html.
21 Electrical Power Generation, Transmission and
Distribution Industry Practices and Environmental
Characterization, June 2019.
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load center. A distribution substation
performs multiple functions, such as
stepping down and stabilizing voltage
going into distribution lines, splitting
and routing distribution power in
multiple directions, and disconnecting
the transmission grid from the
substation when necessary.
Operation of any power plant requires
use of a variety of nonhazardous
materials, including paper, cardboard,
wood, aluminum, containers, packaging
materials, office waste, food, municipal
trash, and wastes from equipment
assembly and maintenance crews.
Potentially hazardous materials are also
frequently used. These materials can
include sandblast media, fuels, paints,
spent vehicle and equipment fluids
(e.g., lubricating oils, hydraulic fluids,
battery electrolytes, glycol coolants),
among others. Hazardous materials may
include, but are not limited to, asbestos
or mercury containing materials,
compressed gases used for welding and
cutting, dielectric fluids, boiler bottom
ash, and oils. Process fluids can be
either hazardous or non-hazardous, and
can include oily water, spent solvents,
chemical cleaning rinses, cooling water,
wash and makeup water, sump and
floor discharges, oily water separator
fluids, boiler blowdown, and water from
surface impoundments. Other materials
beyond those listed here may be used in
the operation of power plants.
The types of hazardous substances
that have been released from facilities in
the Electric Power Generation,
Transmission and Distribution industry
include hydrogen fluoride; vanadium,
zinc, copper, and lead compounds;
ammonia; and arsenic, cobalt, barium,
cadmium, and selenium compounds.
Coal combustion residuals frequently
contain arsenic, selenium, mercury, and
other toxic metals. Other substances
beyond those listed here may also have
been released from facilities in the
industry.
As detailed in the 2010 ANPRM, most
environmental impacts of electric
utilities relate to the fuel sources used
to generate electric power. For example,
burning coal at coal-fired power plants
generates ash that contains
contaminants like mercury, cadmium
and arsenic. Without proper
management, contaminants present in
coal ash can pollute waterways,
groundwater, and drinking water. The
need for Federal action to help ensure
protective coal ash disposal has been
further highlighted by large spills such
as those at the TVA Kingston Plant and
Duke Energy’s Dan River Steam
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C. Industry Economic Profile
Economic trends and financial health
in industrial sectors and their associated
firms can ultimately affect the ability of
individual firms to responsibly address
their environmental liabilities.
Circumstances where firms face
financial stress can potentially
contribute to the abandonment of
facilities and the creation of orphan
wastes sites requiring cleanup. To
consider the potential for firms to
default on their financial obligations
EPA prepared a high-level economic
profile of the Electric Power Generation,
Transmission and Distribution industry,
which includes a summary of relevant
financial metrics, market consolidation
and diversification trends, industry
default risks, and accounting standards
for environmental liabilities of entities
operating within this industry. This
analysis, summarized in this section,
looked at the industry as a whole and
additionally focused on certain
subsectors that might be most pertinent
to evaluate for CERCLA 108(b)
requirements, including facilities
subject to the 2015 Disposal of Coal
Combustion Residuals from Electric
Utilities Final Rule (2015 CCR Rule).24
The full analysis is found in the
background document for this section
available in the docket for this
rulemaking.25
According to the U.S. Census Survey
of Business Owners, firms under NAICS
2211 generated $430 billion in total
value of sales, shipments, receipts,
revenue, or business done in 2012. Of
this $430 billion, 72 percent came from
Electric Power Transmission, Control,
and Distribution, while Electric Power
Generation accounted for the remaining
28 percent. Within Electric Power
Generation, fossil fuel power generation
accounted for the largest portion of
these values, at 68 percent.
The market structures under which
Electric Power Generation,
Transmission and Distribution industry
firms operate are varied and unique to
this industry. Firms, their owners/
shareholders, and taxpayers may
experience different risk profiles based
on the companies’ ownership (privately
or publicly held), as well as the nature
of the market in which they operate
(regulated or deregulated). In addition,
the Federal Government owns nine
power agencies, accounting for seven
percent of net generation and eight
percent of transmission. These
federally-owned utilities present an
extremely low risk of default on
environmental liabilities. Publiclyowned utilities also present a low risk
of bankruptcy due to detailed financial
reporting requirements and government
oversight. Publicly-owned utilities may
also have access to lower-cost forms of
financing, such as tax-free bonds and
local low-interest loans. More
information on the numbers of publiclyowned utilities and investor-owned
utilities, and their relative percentages
across the industry, is provided in the
22 https://www.epa.gov/tn/epa-response-kingstontva-coal-ash-spill, https://www.epa.gov/dukeenergycoalash.
23 Electrical Power Generation, Transmission and
Distribution Industry Practices and Environmental
Characterization, June 2019.
24 Hazardous and Solid Waste Management
System; Disposal of Coal Combustion Residuals
from Electric Utilities (80 FR 21302, April 17, 2015).
25 CERCLA 108(b) Economic Sector Profile:
Electric Power Generation, Transmission, and
Distribution Industry, June 2019.
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Station,22 which caused widespread
environmental and economic damage to
nearby waterways and properties.
Electricity delivery can also affect the
environment in several ways. High
voltage power switches, inverters,
converters, controller devices and other
power electronics contain lead,
brominated fire retardants, and
cadmium in their printed circuit boards;
these circuit boards must be managed
properly to avoid posing risk to human
health or the environment. Electrical
substations and urban manhole facilities
require periodic cleaning, which may
yield hazardous waste. Additionally,
insulating materials such as asbestos
and polychlorinated biphenyls (PCBs)
must also be managed properly.
Industry practices in certain
subsectors, the Fossil Fuel Generation
(221112), Transmission (221121) and
Distribution (221122), of the Electric
Power Generation, Transmission and
Distribution industry use more
hazardous substances and/or generate
larger volumes of hazardous waste.
Several generation subsectors use and
generate lower amounts of hazardous
substances or wastes, including
Hydroelectric (221111), Nuclear
(221113), Solar (221114), Wind
(221115), Geothermal (221116) and
Tidal (221118). Further information on
industry practices is provided in EPA’s
document ‘‘Electrical Power Generation,
Transmission and Distribution Industry
Practices and Environmental
Characterization’’ 23 available in the
docket for this rulemaking.
Facilities in the electric power
generation, transmission and
distribution industry are subject to a
wide range of environmental regulation
and enforcement oversight as discussed
in Sections VII.B. and VII.D. below.
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background document available in the
docket for this rulemaking.26
These utilities can operate in either
regulated or deregulated markets, which
also come with financial risk/stability
tradeoffs. Regulated markets are
characterized by vertically integrated
monopolies that own and operate all
infrastructure and essential components
involved in the delivery of electricity to
their customers. Regulated firms are
given reasonable opportunity to recover
necessary and prudent costs in their
rates through rate regulation. This
generally includes costs necessary to
address environmental liabilities, which
are ultimately covered by the ratepayers. On the other hand, deregulated,
or merchant, markets allow for
competition as generation plants sell
wholesale electricity to retail suppliers,
who set prices, making the performance
of environmental cleanups more
susceptible to market forces and a firm’s
ability to pay.
EPA assessed financial ratios,
including cash flow-solvency,
profitability, efficiency, and debt risk,
for companies in the Electric Power
Generation, Transmission and
Distribution industry to examine trends
over time and provide a deeper
assessment of the industry’s and
companies’ financial health. Generally,
EPA research finds that the Electric
Power Generation, Transmission, and
Distribution industry remains
financially stable. The industry is
characterized by diversified fuel sources
and vertical integration, reducing firms’
dependency on any one subsector and
strengthening long-term financial
stability. Mergers and acquisitions in
recent years have also enhanced
financial stability in the long run by
further diversifying large firms across
subsectors. According to the 2018 U.S.
Cost of Capital Valuation Handbook, in
recent years the industry experienced
less risk and volatility than the overall
market.
Firms in the industry overall remain
profitable and able to cover short-term
debt. The data, however, also indicate
that larger firms in the industry tend to
be more highly leveraged. For some
firms, long-term liabilities have risen
relative to net worth ratios, resulting in
a higher risk of default. While default
risk remains relatively low industrywide, the data suggest two key risk
factors that may threaten financial
stability for some firms: High
dependency on coal and nuclear
generation, and rapid market
consolidation through mergers and
acquisition.
26 Id.
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For example, some notable
bankruptcies in recent years stemmed
from a high dependency on coal and
nuclear power generation. Firms more
solely invested in coal or nuclear
generation faced more difficulty, due to
their lack of diversification into
alternative fuel sources and lower profit
margins.27 Nevertheless, the occurrence
of bankruptcies in this industry has
historically been far lower than that of
many other industries, and such
occurrences remain relatively
infrequent. Further evidence suggests
that due in part to factors such as the
significant amount of fixed
infrastructure and consumer
dependence on electricity, energy sector
firms that default tend to emerge from
bankruptcy and continue to operate
rather than fully close. Such
bankruptcies tend to proceed under
Chapter 11 relief, for purposes of debt
restructuring. Moreover, in most of
these bankruptcies the debtors have
retained their responsibility for
environmental liabilities. Additionally,
if the units are continuing to operate,
the obligation to comply with applicable
environmental regulations, including
the 2015 CCR final rule and any final
amendments, will still be required.
Further discussion on bankruptcy
experience of this industry, including
evaluation of individual bankruptcy
cases, can be found in the background
document to this section found in the
docket.28
Close examination of market
structures and typical bankruptcy
restructuring that exist within the
Electric Power Generation,
Transmission and Distribution industry
suggest that the industry as a whole
should retain the capacity and fiduciary
responsibility to pay the costs of
addressing their environmental
obligations. In this industry, publiclyowned utilities subject to rate-setting
regulations, as well as federally-owned
utilities, are less likely to default on
liabilities than in other industries. For
investor-owned utilities and those that
operate in deregulated markets,
bankruptcy code provisions and legal
precedents can provide other
protections against the discharge of
environmental liabilities in bankruptcy.
27 For example, Energy Future Holdings Corp.
filed for bankruptcy in 2014, followed by First
Energy Solutions in 2018, after they struggled to
make money from coal and nuclear plants in
unfavorable market conditions.
28 CERCLA 108(b) Economic Sector Profile:
Electric Power Generation, Transmission, and
Distribution Industry, June 2019.
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VII. Discussion of Cleanup Sites
Analysis
A. Cleanup Site Evaluations
As described in the Approach to
Developing the Proposed Rule, Section
V above, to evaluate the need for
financial responsibility regulations in
the Electric Power Generation,
Transmission and Distribution industry,
EPA sought examples of pollution that
occurred under a modern regulatory
framework and that required a taxpayerfunded CERCLA cleanup. In its
evaluation, EPA focused first on
identifying response actions at
Superfund National Priority List (NPL)
sites and sites using the Superfund
Alternative Approach (SAA),29 as those
are generally larger cleanups both in
terms of amounts of contaminants
removed and costs to carry out these
cleanups. EPA also looked at Superfund
removals at non-NPL sites. Beyond
these sites in the Federal Superfund
program, EPA included proven CCR
damage cases 30 in its evaluation, given
the prevalence and significance of the
CCR damage cases reviewed for the
2010 ANPRM. Specifically, in that
ANPRM, EPA assessed documented
evidence of proven damage due to CCRs
in 17 cases of groundwater
contamination and 10 cases of surface
water contamination. EPA noted an
additional 40 cases of potential CCRrelated groundwater or surface water
contamination.
To identify the relevant cleanup
cases, EPA included NPL sites, sites
using the SAA, and non-NPL sites
identified in EPA’s Superfund
Enterprise Management System (SEMS)
database. EPA also included CCR
damage cases identified as part of the
2015 CCR Rule.31 EPA collected
29 The ‘‘Superfund Alternative Approach (SAA)’’
uses the same CERCLA authority and investigation
and cleanup process and standards that are used for
NPL sites. The threshold criteria for using the SAA
are: (1) The site must have contamination
significant enough to make it eligible for listing on
the NPL; (2) the site is anticipated to need remedial
action; and, (3) there must be a cooperative, viable,
capable PRP that will sign a CERCLA agreement
with EPA to perform the necessary cleanup.
30 CCR are byproducts of the combustion of coal
at power plants by electric utilities and
independent power producers. Fly ash, bottom ash,
boiler slag, and flue gas desulfurization materials
are types of CCR. On April 17, 2015, the EPA
published a final rule establishing a comprehensive
set of requirements for the disposal of CCR in
landfills and surface impoundments. 80 FR 21302.
These requirements were finalized under the solid
waste provisions, subtitle D, of the Resource
Conservation and Recovery Act.
31 The same list of proven CCR Damage Cases
used in promulgation of the 2015 CCR Rule, was
also relied upon as the best available source of data
on CCR damage cases at the time that these
CERCLA 108(b) analyses were conducted. The 2015
CCR Rule requires groundwater monitoring as a first
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information on the timing and nature of
releases or threatened releases at these
sites. Specifically, EPA sought to
identify, as applicable, facility operation
end dates, release dates, sources of
contamination, NPL proposal dates,
contaminated media, type of
contaminant, cleanup lead, and
information on Superfund expenditures
at the site. For this collection, EPA
relied on information previously
collected as part of the ANPRM,
information available in Superfund site
documents (e.g. NPL listing narratives,
Records of Decision, Action Memos,
Five-Year Reviews), and information in
SEMS as of March 2018, as well as data
for proven CCR damage cases, and
associated site summaries developed for
the 2015 CCR Rule.32 The cleanup case
identification and site information
collection processes are described in
greater detail in the relevant background
documents.33
After compiling information about the
risks and history of each site, EPA
sought to identify instances where
releases occurred under a modern
regulatory framework and those releases
that resulted in Fund-financed response
actions. To do so, EPA’s methodology
applied sequenced screens to the
identified sites. EPA first sought to
screen out any NPL sites or sites using
the SAA where the contaminant release
or cleanup activity occurred before
1980. EPA chose 1980 as a cutoff point
to initially screen out legacy issues
because it was the year that CERCLA
was enacted, as well as the date of the
initial regulations under RCRA Subtitle
C governing the generation, treatment,
storage, and disposal of hazardous
waste. EPA chose to give these
significant RCRA and CERCLA
milestones greatest consideration due to
the large number of issues of waste
management, land disposal, and soil
contamination identified in the review
step in a process to monitor and assess
contaminants from CCR units. Facilities must post
groundwater monitoring data on a publicly
available website. Utilities are required to initiate
corrective actions should groundwater exceedances
be detected. Any such responses being taken under
the 2015 CCR Rule are in early stages, too early to
discern if any impact to taxpayer may result. EPA,
therefore, did not evaluate this data for this
proposal.
32 Hazardous and Solid Waste Management
System; Disposal of Coal Combustion Residuals
from Electric Utilities (80 FR 21302, April 17, 2015).
33 Identification and Evaluation of National
Priority List (NPL) Sites, Sites Using the Superfund
Alternative Approach (SAA), and Coal Combustion
Residual (CCR) Cleanup Cases in the Electric Power
Generation, Transmission, and Distribution
Industry, June 2019, and Identification and
Evaluation of CERCLA 108(b) Electric Power
Generation, Transmission, and Distribution
Industry non-National Priority List (NPL) Removal
Sites, June 2019.
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of the NPL and SAA cases. EPA believes
the 1980 cutoff point to be a
conservative screen (i.e., retains more
sites in the analysis) in that only the
initial RCRA regulations were in place
in 1980 and they were refined,
expanded and enhanced several times
over the next decades. Moreover, the
Agency’s enforcement authorities
expanded in the 1980s as the RCRA
program matured. Notably, the passage
in 1984 of Hazardous and Solid Waste
Amendments (HSWA) resulted in many
regulatory changes and enhanced
enforcement mechanisms.
Next, EPA sought to remove sites
where significant Fund expenditures
had not occurred, because response
actions that were paid for by private
parties do not support the need for
CERCLA Section 108(b) financial
responsibility regulations. Using the
‘‘Action Lead’’ field in SEMS associated
with each site, EPA screened out the
Potentially Responsible Party (PRP) lead
sites. This left only the Mixed Lead
Construction or Government Performed
Construction sites in the analysis,
consistent with EPA’s assessment that at
PRP Performed Construction sites,
responsible parties retain responsibility
for the majority of costs. Therefore, PRP
Performed Construction sites do not
represent significant expenses to the
Superfund.
EPA then reviewed the remaining
sites (i.e., those with both release dates
of 1980 or later and Mixed Lead
Construction or Government Performed
Construction designation in SEMS)
individually in greater detail.
Specifically, EPA considered the site
history and each of the contamination
sources at the site in the context of the
regulations that would be applicable to
that facility today. A particularly
relevant regulation is the 2015 CCR
Rule, which added significant new
requirements to the coal-fired electric
utility plants that dispose of CCR in
landfills and surface impoundments.
The promulgation of the 2015 CCR Rule
effectively establishes the introduction
of the modern regulatory framework for
coal-fired electric utilities. More
information on the regulations EPA
considered is available in Section VII.B.
below.
Findings from EPA’s analysis of the
cleanup cases are discussed below, with
more detailed information available in
the ‘‘Identification and Evaluation of
National Priority List (NPL) Sites, Sites
Using the Superfund Alternative
Approach (SAA), and Coal Combustion
Residual (CCR) Cleanup Cases in the
Electric Power Generation,
Transmission, and Distribution
Industry’’ background document and
the ‘‘Identification and Evaluation of
CERCLA 108(b) Electric Power
Generation, Transmission, and
Distribution Industry non-National
Priority List (NPL) Removal Sites’’
background document in the docket for
this rulemaking.34 The background
documents provide the list of sites
identified as well as the information
considered in the screening and review
process. Also provided is the list of sites
remaining at each stage of the analysis,
as well as the Agency’s rationale for
each site’s subsequent designation.
Using the data sources described
above for the Electric Power Generation,
Transmission, and Distribution
industry, EPA identified 4 NPL sites and
1 site using the SAA, as well as 24 nonNPL CERCLA removal action sites,35
and an additional 27 proven CCRrelated damage cases 36 not tracked
within Superfund data systems, to
evaluate according to the methodology
described above. As described further
below, none of the NPL sites, sites using
the SAA, or CCR damage cases were
ultimately considered incidents that
occurred under a modern regulatory
framework nor were they incidents
where taxpayer funds were relied upon.
For the removal sites, 2 of the 24 cases
showed releases of hazardous
substances under a modern regulatory
framework and required taxpayer
expenditures, as described below.
The four NPL sites evaluated include
two coal-fired power generation plants
with serious CCR contamination, as well
as one hydro-electric facility with PCB
contamination and one nuclear power
generator with radiation contamination.
The one site using the SAA is a steam
plant that generates electric power from
oil-fired burners and natural gas
turbines.
For the four NPL sites, either the dates
of contaminant release were prior to
1980, or the power plants were Federal
facilities owned and operated by the
Federal Government. In the case of the
one site using the SAA, no further
remedial action is called for and costs
for removal and cleanup were covered
by the PRP under its CERCLA agreement
with EPA. As a result, EPA did not
undertake a more detailed review of
these sites, as summarized in Table 1
below.
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TABLE 1—EVALUATION RESULTS FOR NPL AND SAA SITES IN THE ELECTRIC POWER GENERATION, TRANSMISSION AND
DISTRIBUTION INDUSTRY
Total NAICS 2211
NPL & SAA sites
evaluated
Number of NAICS
2211 NPL & SAA
sites screened out
based on pre-1980,
or PRP lead status
Detailed review
concluded release
occurred prior to
modern regulation
Detailed review
identified a possible
modern regulation
release but no
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer funded
response
5
5
0
0
0
Given the small number of NPL and
SAA cleanup cases and the
consideration of CCR damage cases for
the 2010 ANPRM, EPA chose to
evaluate the potential risk from CCR
damage cases. EPA evaluated the 27
proven CCR damage cases identified for
the 2015 CCR Rule. Following the above
methodology for identifying modern
risk, 17 of the cases were screened from
further consideration because the source
of contamination was determined to
34 Identification and Evaluation of National
Priority List (NPL) Sites, Sites Using the Superfund
Alternative Approach (SAA), and Coal Combustion
Residual (CCR) Cleanup Cases in the Electric Power
Generation, Transmission, and Distribution
Industry, June 2019.
35 None of these 24 removal sites are associated
with NPL sites. Removal actions that have taken
place at NPL sites or sites using the SAA, either
before or after listing or designation, are tracked in
SEMS as NPL or SAA level actions and not as
separate removal records.
36 These 27 proven CCR damage cases represent
the final list of sites at Electric Power Generation,
Transmission and Distribution industry facilities
that are not in the Superfund program. Such sites
were included in EPA’s evaluation due to the
known prevalence of ground and surface water
damages associated with the management of CCRs.
Proven damage cases were relied upon as the
highest quality source of data, selected on the basis
of strict criteria where the subject damages are
confirmed as being attributable to Fossil Fuel
Combustion Wastes, based on documented
evidence from Scientific Results, Administrative
Rulings, and/or Court Findings.
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have occurred prior to 1980, or because
the site was designated as a responsible
party lead cleanup. Ten remaining cases
were determined to have occurred after
1980. When these 10 remaining cases
were assessed against today’s modern
regulatory framework, the releases were
all found to have occurred prior to
promulgation of the 2015 CCR Rule 37
and therefore they were screened from
further consideration. As described in
more detail in the Role of Federal and
State Programs section below, the 2015
CCR Rule was specifically designed to
contain requirements that address the
risks from coal combustion residue
disposal—leaking of contaminants into
groundwater, blowing of contaminants
into the air as dust, and the catastrophic
failure of coal ash surface
impoundments, i.e., the sources of
contamination identified in the CCR
damage cases. Therefore, although there
are examples of significant releases in
more recent years (for example, as
recent as 2014 in the case of the Duke
Energy breach at Dan River, and 2008 in
the case of a catastrophic dike failure at
the TVA Kingston Plant), those cases
still occurred prior to the advent of the
new regulatory standards intended to
prevent and remedy these types of
incidents. Although not all provisions of
the 2015 CCR Rule have been fully
implemented, EPA believes the
requirements in place and those to be
implemented in the coming years
sufficiently reduce the risk level at coalfired power plants. The 2015 CCR Rule
is described further in Section VII.B.
The summary results of the analysis
of proven CCR damage cases are
presented in Table 2 below.
TABLE 2—EVALUATION RESULTS FOR CCR DAMAGE CASES IN THE ELECTRIC POWER GENERATION, TRANSMISSION AND
DISTRIBUTION INDUSTRY
Total proven CCR
damage cases
evaluated
Number of CCR
damage cases
screened out based
on pre-1980, or
responsible party
lead status
Detailed review
concluded release
occurred prior to
modern regulation
Detailed review
identified a possible
modern regulation
release but no
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer funded
response
27
17
10
0
0
Additionally, EPA chose to look at the
major removal cases found in the SEMS
database to supplement this analysis.
For this sector, EPA identified 24
removal sites which were evaluated
using the analytic methodology. Using
the methodology, EPA screened out 19
sites because the environmental releases
occurred before 1980 or PRPs led the
response action. To assess the five sites
that remained after those screens, EPA
first conducted a detailed review to
compare the environmental issues at the
sites to the regulations applicable today.
Based on the detailed review, EPA
concluded that the environmental
releases at three of the five remaining
removal sites were caused by a one-time
incident (e.g., transformer fire,
equipment failure), resulting in release
of PCB transformer oil. Although not
designated PRP-lead actions, according
to EPA’s record, PRPs financed and
performed the response actions to the
satisfaction of EPA at these sites, and no
Fund expenditures occurred.
Regarding the other two removal sites
that remained after the screens, EPA’s
detailed review indicated that both
cases involved long-term PCB
contamination resulting from
inappropriate handling and storage of
PCB waste. However, notwithstanding a
government-lead designation in SEMS,
neither of these sites required
significant taxpayer expenditure. EPA
considered all available history at each
site to determine the level of Fund
expenditure. According to EPA’s SEMS
expenditure data for English Station
power plant in New Haven, Connecticut
(an abandoned coal fired power plant,
which operated from 1914 through
1992), the Fund incurred an estimated
cost of $17,000, while the PRP signed a
Partial Consent Order 38 with the state of
Connecticut to spend $30 million to
address site contamination potentially
dating back to 1914. Similarly, EPA
incurred an estimated cost of $374,000
for response actions at Commonwealth
Utilities Corporation (CUC) site in the
Northern Mariana Islands (a currently
operating facility) after the territoryowned company informed EPA that it
lacked the technical capacity to address
the PCB contamination issues at the site.
In this case, EPA did not pursue cost
recovery due, in part, to the PRP’s
inability to pay. The Fund expenditures
for response action at these two sites
were not deemed significant for
purposes of this analysis. More detailed
information can be found in the
background document and supporting
spreadsheets available in the docket for
this rulemaking. The background
document includes the list of sites
identified for analysis, as well as the
data and information considered in the
screening and review process. The
summary results of the analysis are
presented in Table 3 below.
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TABLE 3—EVALUATION RESULTS FOR SUPERFUND REMOVAL SITES IN THE ELECTRIC POWER GENERATION, TRANSMISSION
AND DISTRIBUTION INDUSTRY
Total NAICS 2211
superfund removal
cases evaluated
Number of NAICS
2211 superfund
removal cases
screened out based
on pre-1980, or
PRP lead status
Detailed review
concluded release
occurred prior to
modern regulation
Detailed review
identified a possible
modern regulation
release, but no
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer funded
response
24
19
0
3
2
37 Hazardous and Solid Waste Management
System; Disposal of Coal Combustion Residuals
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38 State of Connecticut v. The United Illuminating
Company Partial Consent Order Number COWSPCB
15–001.
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Prevalent Sources of Risk
EPA’s analysis of cleanup cases
compiled information, where
discernable, on the root cause of
releases. Across the industry overall, the
most prevalent issue was groundwater
contamination from unlined or leaking
CCR surface impoundments and
landfills. Other sources of
contamination observed at these sites
include catastrophic failures/breaches of
dikes, and collapse of dry ash stacks.
The common issues observed at most
removal sites were legacy PCB and
asbestos contamination resulting from
the handling and disposal of PCBcontaining oil and asbestos-containing
insulation materials at fossil fuel
powered electric generation plants.
In part, EPA’s proposed decision to not
issue financial responsibility
requirements for this industry was
determined based on EPA’s review and
analysis of Federal regulations and
complemented by state program
regulations. Industry voluntary
programs were considered as an
additional factor in EPA’s proposed
decision. EPA’s findings and
conclusions about the impact of Federal
and state environmental programs,
along with industry voluntary programs,
are discussed in the following section.
B. Role of Federal and State Programs
and Voluntary Protective Industry
Practices at Facilities in the Electric
Power Generation, Transmission and
Distribution Industry
In the January 6, 2010 ANPRM, EPA
stated that it recognized that the NPL
data reflect releases arising from activity
that, in some cases, predates CERCLA,
RCRA, and other legal requirements
and, as such, the Agency welcomed
information about current releases of
hazardous substances to the
environment to help inform EPA’s
future actions. As discussed in the
Approach section of this proposal, to
enable EPA to base its decision on risk
posed by facilities operating under
modern conditions, i.e., the types of
facilities to which financial
responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices. EPA thus undertook an effort
to gather information about Federal and
state environmental programs and
industry voluntary programs that have
been implemented and are applicable to
currently operating facilities within the
Electric Power Generation,
Transmission and Distribution industry
today. EPA evaluated the extent to
which activities that contributed to the
risk associated with the production,
transportation, treatment, storage, or
disposal of hazardous substances are
now regulated. EPA recognizes that
substantial advances have been made in
the development of manufacturing,
pollution control, and waste
management practices, as well as the
implementation of Federal and state
regulatory programs to prevent and
address such releases at these facilities.
EPA evaluated Federal and state
regulations which address the potential
for release of hazardous substances to
the range of environmental media that
may be affected by a release from a
facility in the Electric Power
Generation, Transmission and
Distribution industry. EPA found that a
comprehensive regulatory framework
has developed since the enactment of
CERCLA. Federal statutes such as the
Clean Air Act (CAA), the Clean Water
Act (CWA), and RCRA are applicable
across the entire industry and lay the
foundation for this regulatory
framework. Specific regulations are
discussed in the background document
according to the environmental issues
that the regulations address: Air
pollution, water pollution, emergency
planning and response, hazardous
substances management, and hazardous
and non-hazardous waste disposal and
management. This background
document is located in the docket for
this rulemaking.39
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Overview of Federal and State
Regulatory Programs and Industry
Voluntary Practices Applicable to the
Electric Power Generation,
Transmission and Distribution Industry
Regulations Addressing Prevalent
Sources Identified in Analysis of
Cleanup Cases
EPA’s analysis of the cleanup cases
found that the most prevalent releases
were:
• Groundwater contamination from
unlined or leaking CCR surface
impoundments and landfills,
catastrophic failures/breaches of CCR
containment dikes, and collapse of dry
ash stacks;
• PCB contamination from the
handling and disposal of PCBcontaining oil; and
39 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power
Generation, Transmission and Distribution
Industry, June 2019.
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• asbestos contamination from
handling and disposal of asbestoscontaining insulation.
CCR is one of the largest industrial
waste streams generated in the United
States. CCRs are residuals from the
combustion of coal at coal-fired power
plants; they consist of fly ash, bottom
ash, boiler slag, and flue gas
desulfurization materials.
Approximately 110 million tons of CCR
was generated in 2012.40 The disposal of
CCR is subject to recent regulation
under the Agency’s 2015 CCR Rule.41
EPA promulgated the rules for CCR
disposal under RCRA Subtitle D. The
2015 CCR Rule addresses risks from
CCR disposal identified in these cases—
leaking of contaminants into
groundwater, blowing of contaminants
into the air as dust, and the catastrophic
failure of CCR surface impoundments
such as what occurred at TVA’s
Kingston Plant—by adding new
requirements for CCR landfills and
surface impoundments. In any cases
where releases might occur, the 2015
CCR Rule includes both closure and
corrective action provisions that could
be used to remedy those releases. These
regulations establish minimum national
criteria for existing and new CCR
landfills, existing and new CCR surface
impoundments, and lateral expansions
of these units including: Location
restrictions, design and operating
criteria, groundwater monitoring and
corrective action, closure and post
closure care requirements, as well as
recordkeeping, notification, and internet
posting requirements. These regulatory
requirements are designed specifically
to prevent the types of risks from CCR
that have occurred in the past. EPA did
not establish financial assurance
requirements as part of the CCR rule.42
EPA recognizes that the 2015 CCR
Rule is not yet fully implemented at this
point, although rule implementation is
ongoing. While the rule became
effective in 2015, it established
timeframes for the technical criteria
40 See
80 FR 21303 (April 17, 2015).
80 FR 21301.
42 In the proposal for the 2015 CCR Rule the
Agency stated that the RCRA subtitle D alternative
did not include proposed financial responsibility
requirements and that any such requirements
would be proposed separately. The Agency
solicited comment on whether financial
responsibility requirements under CERCLA Section
108(b) should be a key Agency focus under a RCRA
subtitle D approach. While the Agency received
numerous comments urging the Agency to establish
financial responsibility as part of the subtitle D
option, the CERCLA Section 108(b) option did not
receive significant support. EPA did not require
financial assurance requirements as part of the 2015
CCR Rule and committed to continue to investigate
the use financial responsibility requirements under
other statutory authorities.
41 See
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based on the amount of time needed to
implement the requirement. Thus, for
some requirements implementation is
complete, and for other requirements,
activities are ongoing. The implemented
standards themselves have materially
reduced risk by, for example, imposing
structural integrity criteria on surface
impoundments holding CCR to help
prevent damages that would occur if the
unit’s embankment or dike failed
structurally, such as the dike failure at
the TVA Kingston Plant in 2008. One of
these criteria is that the surface
impoundment must be assessed to
demonstrate that the unit design and
operation meet minimum factors of
safety, and if the unit does not, the
surface impoundment must be closed.
The deadline to complete this initial
assessment was 2016 or 2108,
depending on designations in the rule,
and represents an important rule
protection that has been implemented.43
An example of an important riskreducing requirement of the 2015 CCR
rule for which implementation is
ongoing is the requirement for
groundwater monitoring and corrective
action. Owners and operators of
landfills and surface impoundments
holding CCR are required to install a
system of monitoring wells to detect
releases of hazardous constituents from
the units. If this monitoring shows an
exceedance of a groundwater protection
standard for specific constituents,
corrective action must be taken to
remedy the contamination. The
groundwater monitoring and corrective
action program is an example of a
requirement that is ongoing but has
already provided meaningful protection
by identifying issues and requiring
corrective action. Based on information
made publicly available by electric
utilities, current groundwater
monitoring results show that a
significant percentage of the electric
utilities will need to implement the
rule’s corrective action program. At this
point, electric utilities are at the early
stages of implementing the corrective
action program.
The 2015 CCR Rule also established
timelines and standards for closure and
post-closure care. Specifically, the rule
requires all CCR units to close in
accordance with specified standards
and to monitor and maintain the units
for a period of time after closure,
including the groundwater monitoring
and corrective action programs. These
criteria help ensure the long-term safety
43 The 2015 CCR Rule requires that operating
surface impoundments must be re-assessed every
five years to ensure that the unit remains
structurally sound.
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of closed CCR units. EPA expects, based
on information made publicly available
by the electric utilities, that a significant
percentage of CCR surface
impoundment will begin closing in the
coming years. A small percentage of
CCR units have already completed
closure under the rule.
As described here, the 2015 CCR Rule
is not yet fully implemented; however,
the activities associated with the
deadlines that have already passed have
already reduced risk from coal-fired
power plants, including that of a
Superfund response being necessary.
Moreover, EPA expects that activities
associated with the ongoing CCR rule
compliance will further reduce risk at
these facilities as units are closed in
accordance with the prescribed
standards and corrective actions taken.
Contamination from PCBs and
asbestos is largely addressed by toxic
substances management regulations
under the authority of the Toxic
Substances Control Act (TSCA). TSCA
provides EPA with authority to issue
rules requiring reporting, recordkeeping, and testing of specific
chemicals and to establish regulations
that restrict the manufacturing
(including import), processing,
distribution in commerce, use, and
disposal of chemicals and mixtures.
TSCA authorizes EPA to prevent
unreasonable risks by regulating
chemicals and mixtures, ranging from
hazard warning labels to the outright
ban on the manufacture, processing,
distribution in commerce or use of
certain chemicals and mixtures. TSCA
and its amendments have also
established specific programs for the
management of certain chemicals—
namely, PCBs, asbestos, radon, lead,
mercury, and formaldehyde.
TSCA section 6(e) establishes a set of
requirements that apply throughout the
lifecycle of PCBs. Specifically, TSCA
prohibits the manufacturing, processing,
distribution in commerce, and use of
PCBs, except under certain exclusions,
exemptions, and authorizations.
Regulations implementing TSCA section
6(e), found in 40 CFR part 761, contain
certain criteria through which EPA may
obtain additional knowledge of the PCB
universe. For example, the regulatory
use authorization for PCB Transformers
generally require owners to register
those transformers with EPA. TSCA also
established EPA’s authority to
promulgate rules to prescribe methods
for the disposal of PCBs. The TSCA PCB
regulations include storage and disposal
requirements for specific types of PCB
waste which are designed to prevent
unreasonable risk of injury to health or
the environment. These regulations may
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dictate comprehensive requirements,
such as verification sampling and
financial assurance, or may provide for
the issuance of an approval (permit)
which takes into account factors specific
to the facility and serves as an
enforceable document that governs PCB
activities at that facility. In particular,
the PCB regulations provide for the
cleanup and disposal of PCB
remediation waste through selfimplementing provisions, performancebased disposal requirements, and sitespecific risk-based approvals. Cleanup
and disposal requirements can include
notification, sampling, approval
requirements, and institutional controls.
Regulatory notification provisions for
PCB waste activities require facilities to
notify EPA of specific PCB activities,
including transportation, disposal,
storage, R&D/treatment, and certain
generation. All affected PCB waste is
manifested from the generator to final
disposal.
Regulation of asbestos is similarly
rigorous. Numerous laws and
regulations control the use of asbestos
and direct procedures for asbestos
abatement. Under TSCA, in 1989, EPA
imposed a partial ban on the
manufacture, import, processing, and
distribution of some asbestos-containing
products, and in the April 2019
Significant New Use Rule 44 ensured
that other discontinued uses of asbestos
cannot reenter the marketplace without
EPA review. OSHA has promulgated
standards for asbestos exposure in work
under 29 CFR 1926.1101. This part sets
permissible exposure limits, set
standards for restriction of access to
regulated areas and require employers to
provide respirators for employees in
those areas, implement monitoring and
exposure assessment testing and
frequency requirements, and prescribe
engineering controls and work practices
for operations to come into compliance.
Additionally, EPA’s Asbestos Worker
Protection Rule, promulgated under the
authority of the TSCA, extends these
worker protections to state and local
government employees involved in
asbestos work who are not covered by
OSHA’s asbestos regulations. Asbestos
demolition methods are separately
regulated by the Asbestos National
Emission Standards for Hazardous Air
Pollutants (NESHAP) regulation under
the Clean Air Act. The Asbestos
NESHAP established requirements that
apply to asbestos removal,
transportation, and disposal practices
from a variety of sources, and is
intended to minimize the release of
44 Restrictions on Discontinued Uses of Asbestos
(84 FR 17345, April 25, 2019).
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asbestos fibers during activities
involving the handling of asbestos.45
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State Regulatory Programs
Some state regulations impose
requirements on the Electric Power
Generation, Transmission, and
Distribution industry in addition to
Federal regulatory requirements. The
requirements of current state programs
can reduce risk at facilities that manage
hazardous substances. EPA researched
key state environmental regulations
relevant to the Electric Power
Generation, Transmission and
Distribution industry from states
representative of the geographic
distribution of facilities. In many cases,
states have adopted Federal regulations
or incorporate them by reference into
state administrative codes. In other
cases, states have promulgated their
own regulatory regimes that expand on
or are more stringent that analogous
Federal regulations or implement
standalone state regulations. A detailed
discussion of state regulations, as well
as the methodology EPA used in
selecting the 25 states that it researched,
is available in the regulation summary
background document in the docket for
this rulemaking.46
States regulations relevant to the
Electric Power Generation,
Transmission and Distribution industry
primarily focus on air pollution. State
air regulations are an example of state
regulations that set standards that are
stricter than Federal regulations.
Specifically, states may set air emission
standards for emissions other than the
six criteria pollutants regulated under
the CAA, such as mercury, volatile
organic compounds, and visible air
emissions. Some states, such as
Wisconsin, have issued emission
limitation and technology standards for
facilities constructed before the
implementation of Federal new source
requirements; those sources are exempt
45 See https://www.epa.gov/asbestos/overviewasbestos-national-emission-standards-hazardousair-pollutants-neshap#was.
46 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power
Generation, Transmission and Distribution
Industry, June 2019. To summarize the state
regulatory framework relevant to fossil fuel electric
power generation facilities, EPA first determined
the geographic distribution of fossil fuel power
plants and determined which states contain over 50
percent of these facilities in the United States.
Those states are: Pennsylvania, Michigan, Indiana,
Illinois, Missouri, Texas, Kentucky, Iowa, Ohio,
Wisconsin, Florida, Minnesota, and North Carolina.
For a description of EPA’s methodology in
determining relevant state regulations, see
Appendix I. For a comprehensive summary of the
relevant state regulations that EPA located, see
Appendix III.
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from the Federal source performance
standards.
In addition, state regulations relevant
to the Electric Power Generation,
Transmission and Distribution industry
primarily focus on the management and
disposal of CCR wastes. More than half
of U.S. states had implemented some
form of their own CCR-related
monitoring, design/siting, and/or
inspection requirements beyond those
called for at the Federal level, prior to
promulgation of the 2015 CCR Rule.
Additionally, most states have been
authorized to implement the RCRA
Subtitle C program, which applies to
certain facilities and waste streams in
the Electric Power Generation,
Transmission and Distribution industry.
For specific substances and operational
practices, some states with authorized
RCRA programs have imposed
requirements that are more stringent
than the Federal regulations.
EPA’s review of current Federal and
state regulations indicates that a
framework of requirements is being
implemented, that reduces the risks
posed by operating facilities in the
Electric Power Generation,
Transmission and Distribution industry.
This risk reduction is critical to
understanding ‘‘the degree and duration
of risk associated with the production,
transportation, treatment, storage, or
disposal of hazardous substances’’ as
well as the risk to taxpayers of being
required to fund response activities
under CERCLA, and thus is a primary
factor leading to EPA’s proposed
decision to not issue financial
responsibility requirements for this
industry.
Industry Voluntary Practices
EPA reviewed facility Risk
Management Plans, industry materials,
government literature and academic
literature to locate voluntary programs
that: (1) Attempt to address CERCLA
hazardous substance management,
disposal and release prevention,
mitigation and response; (2) are relevant
to fossil fuel electric power facilities;
and (3) in which fossil fuel electric
power facilities participated. Industry
voluntary programs fall into three
categories: Those sponsored by Federal,
state, or local governmental agencies;
those fostered within industry
associations or non-governmental
organizations; and those implemented
by individual firms. Some of these
programs set discharge, emissions and
safety standards that supplement
Federal and state standards and may
come with a certification from the
government agency or industry group
that promotes the standards. Other
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programs solicit reporting on emissions
or other data in order to publish
industry performance reports. EPA’s
review of available studies found that
the industry voluntary programs can be
effective at reducing both pollution and
the frequency of government
enforcement actions. A detailed
discussion of industry voluntary
practices, as well as the methodology
used by EPA, is available in Section II.
Industry Voluntary Programs of the
regulation summary background
document in the docket for this
rulemaking.47
C. Existing State and Federal Financial
Responsibility Programs
To help inform the level of risk
associated with classes of facilities in
the Electric Power Generation,
Transmission and Distribution industry,
EPA reviewed existing state and Federal
financial responsibility (FR) programs
that may be applicable to the industry
and that cover a wide range of liabilities
including, closure, post-closure care,
corrective action, third-party personal
injury/property damage, and natural
resource damages. EPA focused on these
types of FR programs for two reasons.
First, these categories of damages,
actions and costs are like those that
could be covered by CERCLA Section
108(b) rulemaking and thus they help
inform the need for CERCLA Section
108(b) FR for this industry. Secondly,
the existence of FR requirements can
help create incentives for sound
practices, reducing the risk of releases
requiring CERCLA response action. EPA
also sought to identify state cleanup
funds that are at least partially funded
by industry (e.g., through a tax on
hazardous wastes generated), and that
could cover future CERCLA liabilities
that may arise at electric power
facilities. EPA’s report focused on the 25
states reviewed in EPA’s reports on
existing state regulatory and voluntary
programs (excluding FR programs) that
may be applicable to electric power
facilities. Finally, EPA reviewed
existing FR requirements in the
following Federal programs: (1) RCRA
Subtitle C Treatment, Storage, Disposal
Facilities; (2) TSCA commercial PCB
waste facilities; (3) EPA Safe Drinking
Water Act Underground Injection
Control wells; (4) U.S. Nuclear
Regulatory Commission (NRC)
requirements for decommissioning
nuclear power reactors; and (5) NRC
47 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power
Generation, Transmission and Distribution Sector,
June 2019.
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insurance requirements for nuclear
incidents. The report is available in the
docket for this rulemaking.48
EPA identified a range of existing FR
programs that may be applicable to
facilities in the Electric Power
Generation, Transmission and
Distribution industry. These programs
include the Federal programs
mentioned above as well as state
programs related to:
• Cleanup or corrective action financial
assurance for discharges/releases of
hazardous waste or hazardous
constituents
• Facility remediation FR associated
with transfer in ownership or facility
closure
• FR for storage tanks containing
hazardous substances
• FR included in enforcement orders to
assure compliance
• FR specific to coal-fired electric
generating facilities
• FR specific to facilities that process or
dispose of coal combustion residuals,
for example, in coal ash ponds and/
or landfills
• FR found in land use/siting permit
conditions
The applicability of these programs
will depend on a variety of facilityspecific factors, for example, use of a
specific piece of equipment (e.g.,
ownership of an underground storage
tank that contains regulated substances)
or engagement in a specified activity
(e.g., a release of a hazardous
substance). Furthermore, state financial
responsibility programs vary by state
and some types of FR programs exist
only in subsets of the states reviewed.
However, a majority of the states
reviewed, 20 of the 25, had financial
responsibility programs in place that
cover the processing or disposal of coal
combustion residuals. EPA believes that
state and Federal FR programs help
reduce risk at facilities where they are
applicable.
D. Compliance and Enforcement History
To understand the experience of
courts settlements and judgments, EPA
looked at compliance and enforcement
in the Electric Power Generation,
Transmission and Distribution industry.
Compliance assistance, monitoring, and
enforcement are important components
of the regulatory framework discussed
above. Through inspections, compliance
monitoring can identify noncompliance
at regulated facilities. Enforcement
actions impose legal instruments to
48 Review of Existing Financial Responsibility
Laws Potentially Applicable to Classes of Facilities
in the Electric Power Generation, Transmission, and
Distribution Industry, June 2019.
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ensure correction of deficiencies and
achieve compliance with environmental
requirements. Compliance and
enforcement actions have certain
functions which EPA considers
particularly pertinent to the risk
determination for rulemaking under
CERCLA Section 108(b). First, through
negotiated agreements, EPA can ensure
that the responsible party carries out or
pays for the cleanup in the event that
noncompliance causes release of a
hazardous material. Second,
enforcement actions can compel a
responsible party to return to
compliance through instruments such as
settlements and orders. Third, the
prospect of financial penalties that can
accompany these enforcement
instruments can encourage compliance.
All of these functions support the
regulatory structure in reducing risk of
Fund expenditures. EPA looked at
applicable enforcement authorities as
well as historical enforcement and
compliance data in the development of
this proposal.
EPA obtained data from the EPA
Enforcement and Compliance History
Online (ECHO) system to provide a
review of Federal enforcement from
FY1973 through FY2017.49 Facilities
whose primary NAICS codes indicate
Electric Power Generation,
Transmission and Distribution industry
activities (NAICS 2211) were included
in EPA’s review. ECHO data show that
initiatives and normal review or
inspection of facilities resulted in over
2000 enforcement cases in the Electric
Power Generation, Transmission and
Distribution industry from FY1974
through FY2017. CAA (62%) and CWA
(12%) cases were the most common.
There are a dramatically smaller number
of cases in RCRA (6%), CERCLA (5%),
and the Emergency Planning and
Community Right-to-Know Act (EPCRA)
(4%). Further description of this review,
which includes details on the topics
summarized in this section, is available
in the background document
‘‘Enforcement, Court Settlements and
Judgments in the Electric Power
Generation, Transmission and
Distribution Industry’’ in the docket for
this rulemaking.
1. Relevant Industry-Specific Focused
Federal Enforcement Initiatives
One way that EPA’s Office of
Enforcement and Compliance Assurance
focuses enforcement and compliance
resources on the most serious
49 ECHO does not include all of EPA’s compliance
and enforcement activity because regions are not
required to report ‘‘informal actions,’’ and it does
not consistently capture all state actions.
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36549
environmental violations is with
enforcement initiatives that develop and
implement national program priorities.
Enforcement initiatives are an important
tool for identification of noncompliance
and subsequent actions to compel return
to compliance. Additionally, these
initiatives emphasize use of the full
range of compliance assurance tools, not
only enforcement, and can thereby
reduce risk by helping facilities prevent
releases that might otherwise be caused
by noncompliance. In recent years,
facilities in the Electric Power
Generation, Transmission and
Distribution industry were included in
two initiatives:
a. Ensuring Energy Extraction Sector
Compliance With Environmental Laws
This initiative focuses on significant
public health and environmental
problems, including exposure to
significant releases of volatile organic
compounds, reducing CAA nonattainment, and reducing water quality
impairment. The background
document 50 details some of the relevant
initiative inspection and NAICS 2211
enforcement results from FY2011
through FY2017.
b. Reducing Air Pollution From the
Largest Sources
This initiative focused on ensuring
that large industrial facilities, like coal
fired power plants, comply with the
Clean Air Act when building new
facilities or making modifications to
existing ones. This initiative benefited
human health and the environment with
significant cuts in air emissions,
especially from coal fired power plants,
since it began in 2005.
2. Enforcement of Recent Electric Power
Generation, Transmission and
Distribution Industry Federal
Requirements
At the time of promulgation, EPA
lacked the authority to enforce the 2015
CCR Rule.51 Enforcement was by citizen
suits only, although the Agency could
use its authorities under RCRA § 7003 to
address conditions that may present an
‘‘imminent and substantial
endangerment.’’ The Water
Infrastructure Improvements for the
50 Enforcement, Court Settlements and Judgments
in the Electric Power Generation, Transmission and
Distribution Industry, June 2019.
51 The 2015 CCR Rule was promulgated under
Subtitle D of RCRA, and at the time of rule
promulgation in 2015, it did not require the states
to adopt or implement the regulations or to develop
a permit program. It also did not provide a
mechanism for EPA to approve a state permit
program to operate ‘‘in lieu of’’ the Federal
regulations.
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Nation (WIIN) Act 52 was signed in
December of 2016 and expanded the
enforcement authorities available to
EPA. The Act states that EPA may use
its information gathering and
enforcement authorities under RCRA
Sections 3007 and 3008 to enforce the
2015 CCR Rule or permit provisions.53
At this time, no cases of Federal
enforcement of this regulation have yet
been concluded.
a. Review of Enforcement Response
Actions
Enforcement cases can include
instances where removal action, release
reduction, or return to compliance
include the removal of contaminated
media by the responsible party.
Measures to remove contamination may
be required in enforcement orders under
the range of environmental statutes and
are negotiated to require activities
aligned with return to compliance.54 In
this situation, taking an enforcement
action directly reduces risks to human
health and the environment. During the
period FY2012 through FY2017, 14
settled Electric Power Generation,
Transmission and Distribution industry
enforcement cases were identified as
those where removal of contaminated
media occurred. Six of these are
CERCLA cases and five are CWA cases.
One CAA and two TSCA cases are also
included.
The substances removed are generally
categorized as metals, hydrocarbons,
and hazardous chemicals. These
cleanups arising from Federal
enforcement actions mitigated risks to
human health and the environment by
removing soils, groundwater, and
sediments contaminated by a variety of
substances, and reduced likelihood of
impact to the Fund.
b. Total Value of Enforcement
Settlements and Judgments
Settlements and judgments in
enforcement cases can result in
financial penalties, supplemental
52 Public
Law 114–322.
2301 of the WIIN Act, 42 U.S.C.
6945(d), amended RCRA to allow States to submit
permit (or other system of prior approval and
conditions) programs to EPA for approval. The Act
states that if a state CCR permitting program is
approved by the Agency (known as a participating
state), those permits will operate ‘‘in lieu of’’ the
Federal regulations in part 257. The Act states that
EPA will develop permits for those units located in
tribal lands and, if given specific appropriations,
EPA will develop a permitting program for those
units located in non-participating states.
54 These ECHO enforcement removals are
separate from the Superfund removals analyzed
elsewhere. ECHO system data includes the
combined value of total enforcement financial
penalties, Supplemental Environmental Projects
(SEPs), and associated compliance activity.
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53 Section
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environmental projects (SEPs), and
activities required to return to
compliance.55 Enforcement settlements
and judgments can ensure that the
responsible party conducts or pays for
cleanup, drive a return to compliance,
and incentivize compliance. For all
enforcement cases from FY1974 through
FY2017 in the Electric Power
Generation, Transmission and
Distribution industry, the total penalties
recovered are over $415 million, the
total value of SEPs is over $129 million,
and the total compliance activity
estimates are over $34.2 billion, all in
2017 inflation-adjusted dollars.
3. Review of Major CERCLA and RCRA
Cases
As stated in the cleanup site
evaluations in Section VII.A., particular
consideration was given to CERCLA and
RCRA regulations as relevant
components of the modern regulatory
framework that applies to the Electric
Power Generation, Transmission and
Distribution industry. There have been
over 224 CERCLA and RCRA cases
brought in this industry, beginning in
1984. The ten largest CERCLA or RCRA
enforcement settlements and judgments
for the Electric Power Generation,
Transmission and Distribution industry
have 2017 inflation-adjusted values
ranging from over $250,000 to $1.1
billion. Further discussion of the details
on the Federal actions for these and
additional criminal cases can be found
in the background document
‘‘Enforcement, Court Settlements and
Judgments in the Electric Power
Generation, Transmission and
Distribution Industry.’’ This document
identifies facilities where
noncompliance was identified and was
addressed by means of formal Federal
enforcement. The scope of the
background document does not include
either facilities where noncompliance
was addressed through informal
enforcement, facilities where
noncompliance was addressed by a
state, or facilities that are in compliance.
The compliance and enforcement
actions documented here and in the
background document show that where
noncompliance is identified, the
preponderance of industry responsible
parties are conducting or paying for
cleanups, returning to compliance, and
improving public health and the
environment. Although enforcement
actions alone do not completely
supplant the need for Fund-financed
55 Compliance actions ordered can include the
removal of contaminated media, installation of new
equipment, or implementation of compliant
processes.
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response actions in the Electric Power
Generation, Transmission and
Distribution (as discussed in section
VIII, below), effective criminal,
administrative and judicial enforcement
demonstrates proper functioning of this
component of the modern regulatory
framework. Enforcement thus serves as
a complementary element supporting
the overall conclusion that CERCLA
108(b) financial assurance is not
necessary.
VIII. Decision To Not Propose
Requirements
Based on consideration of the
analyses described in the previous
sections, EPA has reached a conclusion
that the degree and duration of risk
posed by the Electric Power Generation,
Transmission and Distribution industry
does not warrant financial responsibility
requirements under CERCLA Section
108(b) and thus is proposing to not issue
such requirements. The analysis and
proposed finding in this proposal are
not applicable to and do not affect,
limit, or restrict EPA’s authority to take
a response action or enforcement action
under CERCLA at any facility in the
Electric Power Generation,
Transmission, and Distribution
Industry, including any currently
operating facilities or those described in
this proposal and in the background
documents for this proposal, and to
include requirements for financial
responsibility as part of such response
action. The set of facts in the
rulemaking record related to the
individual facilities discussed in this
proposed rulemaking support the
Agency’s proposal not to issue financial
responsibility requirements under
Section 108(b) for this class, but a
different set of facts could demonstrate
a need for a CERCLA response action at
an individual site. This proposed
rulemaking also does not affect the
Agency’s authority under other
authorities that may apply to individual
facilities, such as the CAA, the CWA,
RCRA, and TSCA.
EPA believes the evaluation of the
Electric Power Generation,
Transmission and Distribution industry
demonstrates significantly reduced risk
at current Electric Power Generation,
Transmission and Distribution
operations. The reduction in risks due
to the requirements of existing
regulatory programs and voluntary
practices combined with reduced costs
to the taxpayer, demonstrated by EPA’s
cleanup case analysis, existing financial
responsibility requirements, and
enforcement actions, reduce the need
for federally-financed response action at
facilities in the Electric Power
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Generation, Transmission and
Distribution industry. EPA looked at
current industry practices, market
structure and economic performance of
the industry; analyzed cleanup cases
and CCR proven damage cases for
facilities in the industry to identify risk;
evaluated the extent to which the
industry and sources of releases are
covered by a modern regulatory
framework, the degree to which
taxpayers have been called upon to pay
for cleanup, and EPA enforcement
history in the industry.
As discussed in Section VII.A., EPA
identified a small number of cleanup
cases that occurred under a modern
regulatory framework and also entailed
some Fund expenditure.
Overwhelmingly, however, the industry
was found to be practicing responsibly
within the current regulatory
framework, with just 2 sites out of the
10,330 establishments in the industry
indicating a significant impact to the
Fund under a modern regulatory
framework. The language in Section
108(b) on determining the degree and
duration of risk and on setting the level
of financial responsibility confers a
significant amount of discretion on EPA.
It is EPA’s assessment that the small set
of federally-funded cleanup cases due to
recent contamination does not warrant
the imposition of financial
responsibility requirements on the
entire Electric Power Generation,
Transmission and Distribution industry
under CERCLA Section 108(b).
EPA’s analysis of Superfund cleanup
cases, supplemented by a review of CCR
damage cases, found that the most
prevalent source of contamination
stemmed from unlined or leaking CCR
surface impoundments and landfills.
Requirements under the newly-imposed
regulatory structure of the 2015 CCR
Rule specifically target this CCR risk,
minimizing the likelihood of future
contamination from this source
incurring liabilities to the Fund. EPA
believes the 2015 CCR rule
requirements, both those implemented
and those with ongoing implementation,
significantly reduce the risk of a
Superfund response being necessary at
these facilities. The Agency believes this
risk reduction is particularly notable in
light of coal fired power plant sector’s
minimal impact on Superfund resources
to date as indicated by the review of
NPL, SAA and removal sites associated
with the sector.
The analysis of removal cases found
PCB and asbestos contamination to be
the leading causes of removal actions in
the industry. The current regulatory
framework, including application of the
TSCA and RCRA regulations, limits the
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use of these contaminants and requires
both proper disposal and cleanup of
these contaminants when releases do
occur.
EPA acknowledges that regulations do
not always prevent releases, and the risk
of a release is lessened but never
eliminated by existing Federal and state
environmental regulations. However,
EPA believes that the network of
Federal and state regulations creates a
comprehensive framework that applies
to prevent releases that could result in
a need for future cleanup. In addition,
enforcement settlements and judgments
that force return to compliance are
effective components of the applicable
regulatory structure. EPA’s analysis of
enforcement history shows that
enforcement of the applicable
regulations provides a lever to monitor
compliance, obtain responsible party
cleanups, and recover financial
penalties. Federal and state regulatory
programs, backed up by effective
enforcement and complemented by
industry voluntary practices, have
improved public health and the
environment significantly since
CERCLA’s initial adoption over 40 years
ago. EPA believes within the Electric
Power Generation, Transmission and
Distribution industry this framework
provides effective controls which
protect human health and the
environment.
Examination of market structures for
the Electric Power Generation,
Transmission and Distribution industry
further indicates comparatively low
likelihood of default on environmental
obligations at the expense of taxpayers
and the government by companies in
this industry. This economic
performance combined with the low
impact to the Fund by facilities with
releases that happened under the
modern regulatory framework, suggests
that the degree of risk to the Fund by
this industry does not rise to a level that
warrants CERCLA Section 108(b)
financial responsibility requirements.
For these reasons, EPA is proposing
today to not issue financial
responsibility requirements under
CERCLA Section 108(b) for this
industry.
place under the modern regulatory
framework where potentially
responsible parties (PRPs) did not lead
the response at the facility.
• Examples of Electric Power
Generation, Transmission and
Distribution industry related response
actions related to releases which took
place under the modern regulatory
framework where PRPs have not taken
financial responsibility for their
environmental liabilities.
• Information on state-lead or other
Federal agency cleanups or instances of
natural resource damages associated
with this industry that may supplement
the information on cleanups gathered
and analyzed for this proposal.
• Information about existing Federal,
state, tribal, and local environmental
requirements for the Electric Power
Generation, Transmission and
Distribution industry relevant to the
prevention of releases of hazardous
substances that were not evaluated as
part of this proposal.
• Information about financial
responsibility requirements applicable
to the Electric Power Generation,
Transmission and Distribution industry
that were not evaluated as part of this
proposal.
A. Solicitation of Public Comment on
This Proposal
EPA solicits comments on all aspects
of this proposal. EPA is specifically
interested in receiving comments on
several issues and requests the
following information:
• Examples of Electric Power
Generation, Transmission and
Distribution industry related response
actions related to releases which took
This proposed rule is not subject to
the requirements of Executive Order
13771 (82 FR 9339, February 3, 2017)
because this proposed rule would not
result in additional cost.
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IX. Statutory and Executive Order
Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is a significant regulatory
action that was submitted to the Office
of Management and Budget (OMB) for
review, because it may raise novel legal
or policy issues [3(f)(4)]. Any changes
made in response to OMB
recommendations have been
documented in the docket for this
rulemaking. EPA did not prepare an
economic analysis for the proposed rule,
since this action imposes no regulatory
requirements.
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
C. Paperwork Reduction Act (PRA)
This action does not impose an
information collection burden under the
PRA, because this action does not
impose any regulatory requirements.
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Federal Register / Vol. 84, No. 145 / Monday, July 29, 2019 / Proposed Rules
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. This action will not
impose any requirements on small
entities.
E. Unfunded Mandates Reform Act
(UMRA)
This action does not contain any
unfunded mandate as described in
UMRA, 2 U.S.C. 1531–1538, and does
not significantly or uniquely affect small
governments, because this action does
not impose any regulatory requirements.
F. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the Federal
Government and the states, or on the
distribution of power and
responsibilities among the various
levels of government, since this action
imposes no regulatory requirements.
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
EPA believes that this action is not
subject to Executive Order 12898
because it does not establish an
environmental health or safety standard,
since this action imposes no regulatory
requirements.
List of Subjects in 40 CFR Part 320
Environmental protection, Electric
power, Financial responsibility,
Hazardous substances.
Dated: July 2, 2019.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2019–15094 Filed 7–26–19; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety
Administration
49 CFR Part 383
[Docket No. FMCSA–2018–0332]
RIN 2126–AC23
This action does not have tribal
implications as specified in Executive
Order 13175, because this action
imposes no regulatory requirements.
Thus, Executive Order 13175 does not
apply to this action.
Commercial Driver’s License Out-ofState Knowledge Test
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
SUMMARY:
This action is not subject to Executive
Order 13045 because it is not
economically significant as defined in
Executive Order 12866, and because
EPA does not believe the environmental
health or safety risks addressed by this
action present a disproportionate risk to
children, since this action imposes no
regulatory requirements.
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
khammond on DSKBBV9HB2PROD with PROPOSALS
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution or use of energy,
since this action imposes no regulatory
requirements.
J. National Technology Transfer and
Advancement Act
This rulemaking does not involve
technical standards.
VerDate Sep<11>2014
16:18 Jul 26, 2019
Jkt 247001
Federal Motor Carrier Safety
Administration (FMCSA), DOT.
ACTION: Notice of Proposed Rulemaking.
AGENCY:
The FMCSA proposes to
allow driver applicants to take the
commercial driver’s license (CDL)
general and specialized knowledge tests
in a State (the testing State) other than
the applicant’s State of domicile. Under
this proposed rule, a State would not be
required to offer the knowledge tests to
out-of-State applicants. However, if the
testing State elects to offer the
knowledge tests to these applicants, it
would transmit the results to the State
of domicile, which would be required to
accept the results. Because this proposal
would not change the existing standards
for administration of the knowledge
tests, the Agency concludes it would
have no detrimental impact on safety.
DATES: Comments on this notice must be
received on or before September 27,
2019.
You may submit comments
identified by Docket Number FMCSA–
2018–0332 using any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the online
instructions for submitting comments.
ADDRESSES:
PO 00000
Frm 00073
Fmt 4702
Sfmt 4702
• Mail: Docket Management Facility,
U.S. Department of Transportation, 1200
New Jersey Avenue SE, West Building,
Ground Floor, Room W12–140,
Washington, DC 20590–0001.
• Hand Delivery or Courier: West
Building, Ground Floor, Room W12–
140, 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5
p.m. ET, Monday through Friday, except
Federal holidays.
• Fax: 202–493–2251.
To avoid duplication, please use only
one of these four methods. See the
‘‘Public Participation and Request for
Comments’’ portion of the
SUPPLEMENTARY INFORMATION section for
instructions on submitting comments,
including collection of information
comments for the Office of Information
and Regulatory Affairs, Office of
Management and Budget (OMB).
FOR FURTHER INFORMATION CONTACT:
Nikki McDavid, Chief, Commercial
Driver’s License Division, Federal Motor
Carrier Safety Administration, 1200
New Jersey Avenue SE, Washington, DC
20590–0001 by telephone at 202–366–
0831 or by email, nikki.mcdavid@
dot.gov. If you have questions on
viewing or submitting material to the
docket, contact Docket Services,
telephone (202) 366–9826.
SUPPLEMENTARY INFORMATION:
I. Public Participation and Request for
Comments
A. Submitting Comments
If you submit a comment, please
include the docket number for this
NPRM (Docket No. FMCSA–2018–
0332), indicate the specific section of
this document to which each section
applies, and provide a reason for each
suggestion or recommendation. You
may submit your comments and
material online or by fax, mail, or hand
delivery, but please use only one of
these means. FMCSA recommends that
you include your name and a mailing
address, an email address, or a phone
number in the body of your document
so that FMCSA can contact you if there
are questions regarding your
submission.
To submit your comment online, go to
https://www.regulations.gov, put the
docket number, FMCSA–2018–0332, in
the keyword box, and click ‘‘Search.’’
When the new screen appears, click on
the ‘‘Comment Now!’’ button and type
your comment into the text box on the
following screen. Choose whether you
are submitting your comment as an
individual or on behalf of a third party
and then submit.
If you submit your comments by mail
or hand delivery, submit them in an
E:\FR\FM\29JYP1.SGM
29JYP1
]]>Agencies
[Federal Register Volume 84, Number 145 (Monday, July 29, 2019)]
[Proposed Rules]
[Pages 36535-36552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15094]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 320
[EPA-HQ-OLEM-2019-0085; FRL-9996-47-OLEM]
RIN 2050-AH03
Financial Responsibility Requirements Under CERCLA Section 108(b)
for Facilities in the Electric Power Generation, Transmission, and
Distribution Industry
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA (or the Agency) is proposing to not impose financial
responsibility (FR) requirements for facilities in the Electric Power
Generation, Transmission, and Distribution industry under Section
108(b) of the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). Section 108(b) addresses the promulgation of
regulations that require classes of facilities to establish and
maintain evidence of financial responsibility consistent with the
degree and duration of risk associated with the production,
transportation, treatment, storage, or disposal of hazardous
substances.
DATES: Comments must be received on or before September 27, 2019.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
SFUND-2019-0085, at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the Web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
[[Page 36536]]
FOR FURTHER INFORMATION CONTACT: For more information on this document,
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office
of Resource Conservation and Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC 20460; telephone (703) 308-7025 or
(email) [email protected].
SUPPLEMENTARY INFORMATION:
How can I get copies of this document and other related information?
This Federal Register proposed rule and supporting documentation
are available in a docket EPA has established for this action under
Docket ID No. EPA-HQ-OLEM-2019-0085. All documents in the docket are
listed in the https://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically at
https://www.regulations.gov or in hard copy at EPA/DC, WJC West, Room
3334, 1301 Constitution Ave. NW, Washington, DC 20460. This Docket
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (202)
566-0276. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
for the Public Reading Room is (202) 566-1744.
Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
C. Summary of the Major Provisions of the Regulatory Action
D. Costs and Benefits of the Regulatory Action
II. Authority
III. Background Information
A. Overview of Section 108(b) and Other CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent To Proceed With
Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed Rule
VI. Electric Power Generation, Transmission and Distribution
Industry Overview
A. Identification of Electric Power Generation, Transmission and
Distribution Industry
B. Current Industry Practices
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and Voluntary Protective
Industry Practices at Facilities in the Electric Power Generation,
Transmission and Distribution Industry
C. Existing State and Federal Financial Responsibility Programs
D. Compliance and Enforcement History
1. Relevant Industry-Specific Focused Federal Enforcement
Initiatives
2. Enforcement of Recent Electric Power Generation, Transmission
and Distribution Industry Federal Requirements
3. Review of Major CERCLA and RCRA Cases
VIII. Decision To Not Propose Requirements
A. Solicitation of Public Comment on This Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
I. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) directs EPA to develop
regulations that require classes of facilities to establish and
maintain evidence of financial responsibility consistent with the
degree and duration of risk associated with the production,
transportation, treatment, storage, or disposal of hazardous
substances. The statute further requires that the level of financial
responsibility be established to protect against the level of risk the
President, in his discretion, believes is appropriate, based on factors
including the payment experience of the Hazardous Substance Superfund
(Fund). The President's authority under this section for non-
transportation-related facilities has been delegated to the EPA
Administrator.
In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a lawsuit in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial responsibility rules for
the hardrock mining industry, and for the three additional industries
identified by EPA in the 2010 Advance Notice of Proposed Rulemaking
(ANPRM),\1\ that is, Chemical Manufacturing; Petroleum and Coal
Products Manufacturing; and Electric Power Generation, Transmission,
and Distribution. Following oral arguments, EPA and the petitioners
submitted a Joint Motion for an Order on Consent, filed on August 31,
2015, which included a schedule for further administrative proceedings
under CERCLA Section 108(b). The court order granting the motion was
issued on January 29, 2016. A copy of the order can be found in the
docket for this rulemaking.
---------------------------------------------------------------------------
\1\ See 75 FR 816.
---------------------------------------------------------------------------
In addition to requiring EPA to publish a proposed rule on hardrock
mining financial requirements by December 1, 2016, the January 2016
Order requires EPA to ``sign for publication in the Federal Register a
determination whether EPA will issue a notice of proposed rulemaking on
financial assurance requirements under Section 108(b) in the (a)
chemical manufacturing industry; (b) petroleum and coal products
manufacturing industry; and (c) electric power generation,
transmission, and distribution industry by December 1, 2016.'' EPA
signed the required determination on December 1, 2016; the document was
published on January 11, 2017 \2\ and announced EPA's intent to proceed
with rulemakings for all three of the classes.
---------------------------------------------------------------------------
\2\ See 82 FR 3512.
---------------------------------------------------------------------------
B. Purpose of This Action
The purpose of today's action is to propose that financial
responsibility requirements under CERCLA Section 108(b) at facilities
in the Electric Power Generation, Transmission, and Distribution
industry are not necessary, and solicit comments on this proposal. EPA
has reached this conclusion based on the analyses described in Parts VI
and VII of this proposal. The evidence
[[Page 36537]]
provided in these analyses contributed to EPA's proposed finding that
the degree and duration of risk posed by the Electric Power Generation,
Transmission and Distribution Industry does not warrant financial
responsibility requirements under CERCLA Section 108(b).
The analysis and proposed finding in this proposal are not
applicable to and do not affect, limit, or restrict EPA's authority to
take a response action or enforcement action under CERCLA at any
facility in the Electric Power Generation, Transmission, and
Distribution Industry, including any currently operating facilities or
those described in this proposal and in the background documents for
this proposal, and to include requirements for financial responsibility
as part of such response action. The set of facts in the rulemaking
record related to the individual facilities discussed in this proposed
rulemaking support the Agency's proposal not to issue financial
responsibility requirements under Section 108(b) for this class, but a
different set of facts could demonstrate a need for a CERCLA response
action at an individual site. This proposed rulemaking also does not
affect the Agency's authority under other authorities that may apply to
individual facilities, such as the Clean Air Act (CAA), the Clean Water
Act (CWA), the Resource Conservation and Recovery Act (RCRA), and the
Toxic Substances Control Act (TSCA).
C. Summary of the Major Provisions of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Electric Power Generation, Transmission, and Distribution industry.
Thus, there are no proposed regulatory provisions associated with this
action.
D. Costs and Benefits of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Electric Power Generation, Transmission, and Distribution industry.
EPA, therefore, has not conducted a Regulatory Impact Analysis for this
action.
II. Authority
This proposed rule is issued under the authority of Sections 101,
104, 108 and 115 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. 9601,
9604, 9608 and 9615, and Executive Order 12580. (52 FR 2923, January
29, 1987).
III. Background Information
A. Overview of Section 108(b) and Other CERCLA Provisions
CERCLA, as amended by the Superfund Amendments and Reauthorization
Act of 1986 (SARA), establishes a comprehensive environmental response
and cleanup program. Generally, CERCLA authorizes EPA \3\ to undertake
removal or remedial actions in response to any release or threatened
release into the environment of ``hazardous substances'' or, in some
circumstances, any other ``pollutant or contaminant.'' As defined in
CERCLA Section 101, removal actions include actions to ``prevent,
minimize, or mitigate damage to the public health or welfare or to the
environment,'' and remedial actions are ``actions consistent with [a]
permanent remedy[.]'' Remedial and removal actions are jointly referred
to as ``response actions.'' CERCLA Section 111 authorizes the use of
the Hazardous Substance Superfund (Fund) established under title 26,
United States Code, to finance response actions undertaken by EPA. In
addition, CERCLA Section 106 gives EPA \4\ authority to compel action
by liable parties in response to a release or threatened release of a
hazardous substance that may pose an ``imminent and substantial
endangerment'' to public health or welfare or the environment.
---------------------------------------------------------------------------
\3\ Although Congress conferred the authority for administering
CERCLA on the President, most of that authority has since been
delegated to EPA. See Exec. Order No. 12580, 52 FR. 2923 (Jan. 23,
1987). The executive order also delegates to other Federal agencies
specified CERCLA response authorities at certain facilities under
their ``jurisdiction, custody or control.''
\4\ CERCLA Sections 106 and 122 authority is also delegated to
other Federal agencies in certain circumstances. See Exec. Order No.
13016, 61 FR 45871 (Aug. 28, 1996).
---------------------------------------------------------------------------
CERCLA Section 107 imposes liability for response costs on a
variety of parties, including certain past owners and operators,
current owners and operators, and certain generators, arrangers, and
transporters of hazardous substances. Such parties are liable for
certain costs and damages, including all costs of removal or remedial
action incurred by the Federal Government, so long as the costs
incurred are ``not inconsistent with the national contingency plan,''
(the National Oil and Hazardous Substances Pollution Contingency Plan
or NCP).\5\ Section 107 also imposes liability for natural resource
damages and health assessment costs.\6\
---------------------------------------------------------------------------
\5\ See CERCLA Section 107 (a)(4)(A).
\6\ See CERCLA Section 107 (a)(4)(C)-(D).
---------------------------------------------------------------------------
Section 108(b) establishes an authority to require owners and
operators of classes of facilities to establish and maintain evidence
of financial responsibility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' In turn,
Section 108(b)(2) directs that the level of financial responsibility
shall be initially established, and, when necessary, adjusted to
protect against the level of risk that EPA in its discretion believes
is appropriate based on the payment experience of the Fund, commercial
insurers, courts settlements and judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not, however, preclude EPA from
considering other factors in addition to those specifically listed. The
statute prohibited promulgation of such regulations before December
1985.
In addition, Section 108(b)(1) provides for publication within
three years of the date of enactment of CERCLA of a ``priority notice''
identifying the classes of facilities for which EPA would first develop
financial responsibility requirements. It also directs that priority in
the development of requirements shall be accorded to those classes of
facilities, owners, and operators that present the highest level of
risk of injury.
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
On March 11, 2008, Sierra Club, Great Basin Resource Watch, Amigos
Bravos, and Idaho Conservation League filed a suit against former EPA
Administrator Stephen Johnson and former Secretary of the U.S.
Department of Transportation Mary E. Peters, in the U.S. District Court
for the Northern District of California. Sierra Club, et al. v.
Johnson, No. 08-01409 (N.D. Cal.). On February 25, 2009, that court
ordered EPA to publish the Priority Notice required by CERCLA Section
108(b)(1) later that year. The 2009 Priority Notice and supporting
documentation presented the Agency's conclusion that hardrock mining
facilities would be the first class of facilities for which EPA would
issue
[[Page 36538]]
CERCLA Section 108(b) requirements.\7\ Additionally, the 2009 Priority
Notice stated EPA's view that classes of facilities outside of the
hardrock mining industry may warrant the development of financial
responsibility requirements.\8\ The Agency committed to gather and
analyze data on additional classes of facilities and consider them for
possible regulation. The court later dismissed the remaining claims.
---------------------------------------------------------------------------
\7\ See 74 FR 37214 (July 28, 2009).
\8\ Id. at 37218.
---------------------------------------------------------------------------
2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
On January 6, 2010, EPA published an Advance Notice of Proposed
Rulemaking (ANPRM),\9\ in which the Agency identified three additional
industrial sectors for the development, as necessary, of proposed
Section 108(b) regulation. To develop the list of additional classes
for the 2010 ANPRM, EPA used information from the CERCLA National
Priorities List (NPL) and analyzed data from the Resource Conservation
and Recovery Act (RCRA) Biennial Report (BR) and the Toxics Release
Inventory (TRI). As was discussed in the ANPRM, these sources were
chosen because ``they are well-established, reliable sources of
information on facilities associated with hazardous substances, and
were readily available to the Agency.'' \10\ As an additional factor
for consideration, EPA looked at certain known cases where impacts to
groundwater or surface water had been documented, as well as recent
catastrophic releases, such as the 2008 release of coal ash from the
Tennessee Valley Authority's (TVA) Kingston Plant. The result of this
analysis is explained in the 2010 ANPRM in detail, with the conclusion
that three industries--the Chemical Manufacturing industry (North
American Industry Classification System (NAICS) 325), the Petroleum and
Coal Products Manufacturing industry (NAICS 324), and the Electric
Power Generation, Transmission, and Distribution industry (NAICS
2211)--would be considered for financial responsibility requirements
under Sec. 108(b).
---------------------------------------------------------------------------
\9\ See 75 FR 816.
\10\ See 75 FR 819.
---------------------------------------------------------------------------
EPA specifically requested public comment in the 2010 ANPRM on
whether to propose a regulation under CERCLA Section 108(b) for each of
the three industries, or any class or classes within those industries,
including information demonstrating why such financial responsibility
requirements would or would not be appropriate for those particular
classes. In addition, the Agency requested information related to the
industry categories discussed in the ANPRM, including data on facility
operations, information on past and expected future environmental
response actions, use of financial responsibility mechanisms by the
industry categories, existing financial responsibility requirements,
and other information the Agency might consider in setting financial
responsibility levels. Finally, EPA requested information from the
insurance and the financial sectors related to instrument availability
and implementation, and potential instrument conditions.\11\ Comments
received on the ANPRM are summarized in the Additional Classes 2017
Notice of Intent to Proceed with Rulemakings, section III.B.4 below.
---------------------------------------------------------------------------
\11\ See 75 FR 830-831.
---------------------------------------------------------------------------
3. 2014 Petition for Writ of Mandamus
Dissatisfied with the pace of EPA's progress, in August 2014, the
Idaho Conservation League, Earthworks, Sierra Club, Amigos Bravos,
Great Basin Resource Watch, and Communities for a Better Environment
filed a new lawsuit in the U.S. Court of Appeals for the District of
Columbia Circuit, seeking a writ of mandamus requiring issuance of
CERCLA Section 108(b) financial assurance rules for the hardrock mining
industry and for three other industries: Chemical manufacturing;
petroleum and coal products manufacturing; and electric power
generation, transmission, and distribution. Thirteen companies and
organizations representing business interests in the hardrock mining
and other sectors sought to intervene in the case.
Following oral argument, the court issued an Order in May 2015
requiring the parties to submit, among other things, supplemental
submissions addressing a schedule for further administrative
proceedings under CERCLA Section 108(b). The Order further encouraged
the parties to confer regarding a schedule and, if possible, to submit
a jointly agreed upon proposal. Petitioners and EPA were able to reach
agreement on a schedule. The parties requested an Order from the court
with a schedule calling for the Agency to sign a proposed rule for the
hardrock mining industry by December 1, 2016, and a final rule by
December 1, 2017. The joint motion also included a requested schedule
for the additional industry classes, which called for EPA to sign by
December 1, 2016, a determination on whether EPA will issue a notice of
proposed rulemaking for classes of facilities in any or all of the
other industries, and a signature schedule for proposed and final rules
for the additional industry classes as follows:
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the first additional industry by July 2,
2019, and sign for publication in the Federal Register a notice of
its final action by December 2, 2020.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the second additional industry by December
4, 2019, and sign for publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the third additional industry by December
1, 2022, and sign for publication in the Federal Register a notice
of its final action by December 4, 2024.\12\
---------------------------------------------------------------------------
\12\ In Re: Idaho Conservation League, No. 14-1149 (D.C. Cir.
Jan. 29, 2016) (order granting joint motion).
While the joint motion identified the other industries as being the
Chemical Manufacturing industry, the Petroleum and Coal Products
Manufacturing industry, and the Electric Power Generation, Transmission
and Distribution industry, and set a rulemaking schedule, it did not
indicate which industry would be the first, second or third. The Joint
Motion specified that it did not alter the Agency's discretion as
provided by CERCLA and administrative law.\13\
---------------------------------------------------------------------------
\13\ See Joint Motion at 6 (``Nothing in this Joint Motion
should be construed to limit or modify the discretion accorded EPA
by CERCLA or the general principles of administrative law.'')
---------------------------------------------------------------------------
On January 29, 2016, the court granted the joint motion and issued
an Order that mirrored the submitted schedule in substance. The Order
did not mandate any specific outcome of the rulemakings.\14\ The court
Order can be found in the docket for this rulemaking. The signing of
this proposed rule by July 2, 2019, will satisfy one component of the
court Order. EPA has selected the Electric Power Generation,
Transmission and Distribution industry as the first additional industry
to meet the schedule laid out in the Order.
---------------------------------------------------------------------------
\14\ In granting the Joint Motion, the court expressly stated
that its Order ``merely requires that EPA conduct a rulemaking and
then decide whether to promulgate a new rule--the content of which
is not in any way dictated by the [Order].'' In re Idaho
Conservation League, at 17 (quoting Defenders of Wildlife v.
Perciasepe, 714 F.3d 1317, 1324 (D.C. Cir. 2013).
---------------------------------------------------------------------------
4. Additional Classes 2017 Notice of Intent To Proceed With Rulemakings
Consistent with the January 2016 court Order, EPA signed on
December 1, 2016, a determination regarding rulemakings for the
additional classes--a Notice of Intent to Proceed with
[[Page 36539]]
Rulemakings for all three of the classes. The document was published in
the Federal Register on January 11, 2017.\15\
---------------------------------------------------------------------------
\15\ See 82 FR 3512.
---------------------------------------------------------------------------
The Notice of Intent to Proceed with Rulemakings formally announced
EPA's intention to move forward with the regulatory process and publish
a notice of proposed rulemaking for classes of facilities within the
three industries identified in the 2010 ANPRM. The announcement in the
Notice of Intent to Proceed with Rulemakings was not a determination
that requirements were necessary for any or all of the classes of
facilities within the three industries, or that EPA would propose such
requirements. In addition, the document gave an overview of some of the
comments received on the 2010 ANPRM and initial responses to those
comments. The comments on the ANPRM which specifically addressed the
need for CERCLA Section 108(b) regulation for the three additional
classes fell into four categories: (1) Other laws that the industry
complies with that obviate the need for CERCLA Section 108(b)
regulation; (2) the sources of data EPA used to select the industries;
(3) past versus current practices within each industry; and (4) the
overall need for financial responsibility for each industry. In
discussing the ANPRM comments in the 2017 Notice of Intent to Proceed
with Rulemakings, the Agency stated its intent to use other, more
industry-specific and more current sources of data to identify risk,
and to consider site factors that reduce risks, including those that
result from compliance with other regulatory requirements, and develop
a regulatory proposal based on the record EPA would develop for each
rulemaking.
At the time of the 2017 Notice of Intent to Proceed with
Rulemakings, EPA had not identified sufficient evidence to determine
that the rulemaking process was not warranted, nor had EPA identified
sufficient evidence to establish CERCLA Section 108(b) requirements.
The document described a process to gather and analyze additional
information to support the Agency's ultimate decision, including
further evaluation of the classes of facilities within the three
industry sectors. The Notice of Intent to Proceed with Rulemakings
stated that EPA would decide whether proposal of requirements was
necessary and, accordingly propose appropriate requirements or propose
not to impose requirements.
IV. Statutory Interpretation
CERCLA Section 108(b) provides general instructions on how to
determine what financial responsibility requirements to impose for a
particular class of facility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' Section
108(b)(2) directs that the ``level of financial responsibility shall be
initially established and, when necessary, adjusted to protect against
the level of risk'' that EPA ``believes is appropriate based on the
payment experience of the Fund, commercial insurers, courts settlements
and judgments, and voluntary claims satisfaction.'' Read together, the
statutory language on determining the degree and duration of risk and
on setting the level of financial responsibility confers a significant
amount of discretion on EPA.
Section 108(b)(1) directs EPA to evaluate risk from a selected
class of facilities, but it does not suggest that a precise calculation
of risk is either necessary or feasible. Although the risk associated
with a particular site can be ascertained only once a response action
is required, any financial responsibility requirements imposed under
Section 108(b) would be imposed before any such response action was
identified. The statute thus necessarily confers on EPA wide latitude
to determine, in a Section 108(b) rulemaking proceeding, what degree
and duration of risk are presented by the identified class.
Section 108(b)(2) in turn directs that EPA establish the level of
financial responsibility that EPA in its discretion believes is
appropriate to protect against the risk. This statutory direction does
not specify a methodology for the evaluation. Rather, this decision is
committed to the discretion of the EPA Administrator. While the statute
provides a list of information sources on which EPA is to base its
decision--the payment experience of the Superfund, commercial insurers,
courts settlements and judgments, and voluntary claims satisfaction--
the statute does not indicate that this list of factors is exclusive,
nor does it specify how the information from these sources is to be
used, such as by indicating how these categories are to be weighted
relative to one another.
For the electric power industry, EPA has investigated the payment
history of the Fund, and enforcement settlements and judgments, to
evaluate, in the context of this CERCLA Section 108(b) rulemaking, the
risk from facilities that would be subject to CERCLA financial
responsibility requirements. The statute also authorizes EPA to
consider the existence of Federal and state regulatory requirements,
including any financial responsibility requirements. Section 108(b)(1)
directs EPA to promulgate financial responsibility requirements ``in
addition to those under subtitle C of the Solid Waste Disposal Act and
other Federal law.'' According to the 1980 Senate Report on legislation
that was later enacted as CERCLA, Congress considered it appropriate
for EPA to examine those additional requirements when evaluating the
degree and duration of risk under what was later enacted as CERCLA
Section 108(b):
The bill requires also that facilities maintain evidence of
financial responsibility consistent with the degree and duration of
risks associated with the production, transportation, treatment,
storage, and disposal of hazardous substances. These requirements
are in addition to the financial responsibility requirements
promulgated under the authority of Sec. 3004(6) of the Solid Waste
Disposal Act. It is not the intention of the Committee that
operators of facilities covered by Sec. 3004(6) of that Act be
subject to two financial responsibility requirements for the same
dangers.\16\
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\16\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
While the Senate Report mentions RCRA Section 3004(6) specifically,
it is consistent with Congressional intent for EPA to consider other
potentially duplicative federal financial responsibility requirements
when examining the ``degree and duration of risk'' in the context of
CERCLA Sec. 108(b) to determine whether and what financial
responsibility requirements are appropriate. It is also consistent with
Congressional intent for EPA to consider state laws before imposing
additional Federal financial responsibility requirements on facilities.
Consideration of state laws before developing financial
responsibility regulations is consistent with CERCLA Section 114(d),
which prevents states from imposing financial responsibility
requirements for liability for releases of the same hazardous
substances after a facility is regulated under Section 108 of CERCLA.
Just as Congress clearly intended to prevent states from imposing
duplicative financial assurance requirements after EPA had acted to
impose such requirements under Section 108, it is reasonable to also
conclude that Congress did not mean for EPA to disrupt existing state
programs that are successfully
[[Page 36540]]
regulating industrial operations to minimize risk, including the risk
of taxpayer liability for response actions under CERCLA, and that
specifically include appropriate financial assurance requirements under
state law. Reviews of both state programs and other federal programs
help to identify whether and at what level there is current risk that
is appropriate to address under CERCLA Section 108.
EPA also believes that, when evaluating whether and at what level
it is appropriate to require evidence of financial responsibility, EPA
should examine information on electric power generation, transmission
and distribution facilities operating under modern conditions, i.e.,
the type of facilities to which financial responsibility regulations
would apply. These modern conditions include state and federal
regulatory requirements and financial responsibility requirements that
currently apply to operating facilities. This reading of Section 108(b)
is consistent with statements in the legislative history of the
statute. The 1980 Senate Report states that the legislative language
that became Section 108(b) ``requires those engaged in businesses
involving hazardous substances to maintain evidence of financial
responsibility commensurate with the risk which they present.'' \17\
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\17\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
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This statutory interpretation is reflected in this proposal. Any
financial responsibility requirements imposed under Section 108(b)
would apply to currently operating facilities. EPA thus sought to
examine the extent to which hazardous substance management at currently
operating electric power generation, transmission and distribution
facilities as a class continues to present risk. Moreover, the
statutory direction to identify requirements consistent with identified
risks guides EPA's interpretation that imposition of financial
responsibility requirements under Section 108(b) would not be necessary
for currently operating facilities that present minimal current risk.
The interpretation in this proposal does not extend to any site-
specific determinations of risk made in the context of individual
CERCLA site responses. Those decisions will continue to be made in
accordance with preexisting procedures.
EPA thus examined records of releases of hazardous substances from
facilities operating under a current regulatory framework and data on
the actions taken and expenditures incurred in response to such
releases. The data collected do not reflect historical practices, many
of which would be illegal under current environmental laws and
regulations. Instead, EPA has considered current federal and state
regulation of hazardous substance production, transportation,
treatment, storage, or disposal applicable to facilities in the
electric power industry.
V. Approach To Developing This Proposed Rule
Based on the statutory interpretation described above, EPA
developed an analytical approach to determine whether the current risk
under a modern regulatory framework within the Electric Power
Generation, Transmission and Distribution industry rises to the level
that warrants imposition of financial responsibility requirements under
CERCLA Section 108(b). Specifically, EPA designed the analytical
approach to determine the need for financial responsibility for this
industry based on the degree and duration of risk associated with the
industry's production, transportation, treatment, storage, or disposal
of hazardous substances. The approach, described in detail below, looks
at risks by examining records of releases of hazardous substances from
facilities in the industry in combination with the payment history of
the Fund, and enforcement settlements and judgments. To enable EPA to
base its decision on risk posed by facilities operating under modern
conditions, i.e., the types of facilities to which financial
responsibility requirements would apply, EPA developed an approach to
identify and consider relevant state and Federal regulatory
requirements and financial responsibility requirements that currently
apply to operating facilities, as well as voluntary protective
practices.
EPA sought to determine the level of risk at current Electric Power
Generation, Transmission and Distribution operations. Relevant to this
decision are requirements of existing regulatory programs and voluntary
practices, including existing financial responsibility requirements,
which can reduce costs to the taxpayer; EPA's experience with clean-ups
in the Electric Power Generation, Transmission and Distribution
industry; and enforcement actions, which may reduce the need for
federally-financed response action at facilities in the Electric Power
Generation, Transmission and Distribution industry.
As part of scoping the Electric Power Generation, Transmission and
Distribution industry for this proposal, EPA sought to understand
general characteristics of the industry that may be relevant to
financial responsibility under Section 108(b). To do this EPA compiled
industry features, including the types of activities undertaken and
wastes handled or produced. Additionally, EPA looked at the financial
condition of the industry to assess the ability of facilities in this
class to pay for any environmental obligations they may incur.
Discussion of these aspects of the industry is included in Section VI
of this proposal.
Section VII.A. describes EPA's evaluation of cleanup cases at
facilities in the Electric Power Generation, Transmission and
Distribution industry. So-called ``cleanup cases'' are sites in the
Electric Power Generation, Transmission and Distribution industry where
releases and cleanup actions occurred. To perform this evaluation EPA
developed an analytic approach that considered cleanup cases to
identify risk at currently operating facilities and where taxpayer
funds were expended for response action. EPA first examined each site
to determine the nature and timing of release. EPA used this
information to determine if releases occurred under current
regulations. As an initial screen, releases that occurred prior to 1980
were deemed to be legacy releases that occurred prior to the advent of
the modern environmental regulatory framework and were therefore
screened out of our analysis. Once EPA identified those sites with more
recent releases occurring under a modern environmental regulatory
framework, EPA then focused on those response actions that were paid
for by the taxpayer by looking at those sites with Fund-financed
cleanup activity.
As described in Section VII.B., to understand the modern regulatory
framework applicable to currently operating facilities within the
Electric Power Generation, Transmission and Distribution industry, EPA
compiled applicable Federal and state regulations. Specifically, EPA
looked to regulations that address the types of releases identified in
the cleanup cases. This review also considered industry voluntary
programs that could reduce risk of releases. EPA also identified
financial responsibility regulations that apply to facilities in the
Electric Power Generation, Transmission and Distribution industry,
Section VII.C., and compliance and enforcement history for the relevant
regulations, Section VII.D.
In considering how to structure its analysis and what data sources
to examine, EPA looked at prior analysis done for selection of industry
classes in the 2010 ANPRM and public comments responding to EPA's
approach. In the
[[Page 36541]]
public comment period for the ANPRM, EPA received a total of 67
comments from 30 commenters on the Chemical Manufacturing industry,
Petroleum and Coal Products Manufacturing industry, and the Electric
Power Generation, Transmission, and Distribution industry. In addition,
EPA received five comments to the Hardrock Mining Proposed Rule related
to the additional classes of facilities.
A large portion of the comments EPA received on the ANPRM were
related to the Electric Power Generation, Transmission and Distribution
industry. Commenters noted their view that this industry is distinct
from other industries because it does not have a history of failing to
cover remediation costs. Further, commenters stated that facilities in
this industry are subject to multiple Federal environmental statutes
and regulations and thus EPA should not duplicate existing financial
assurance. In addition, commenters stated that EPA should focus on
large electric power generation facilities that produce and release
hazardous substances, not transmission or distribution facilities;
wind, solar, nuclear, or hydro-electric plants; or natural gas-fired
and oil-fired electric generation facilities. Lastly, some commenters
believe that EPA placed too much emphasis on Toxics Release Inventory
(TRI) data and RCRA Biennial Report (BR) data and expressed their
opinions that these data sources are not risk based.
In its 2017 Notice of Intent to Proceed with Rulemakings \18\ EPA
acknowledged limitations on information that can be gained from TRI and
BR data and announced its intention to use industry-specific and
current sources of data to identify risk for the purposes of the
rulemakings. In the analysis conducted to assess risk in the Electric
Power Generation, Transmission and Distribution industry for this
action, EPA chose not to rely on TRI and BR data. While the Agency
found those data sources appropriate for identifying classes of
facilities to examine further at the time of the 2010 ANPRM, it did not
find them valuable for assessing current risk in the industry or the
need for a response action.
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\18\ See 82 FR 3512.
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V. Electric Power Generation, Transmission and Distribution Industry
Overview
A. Identification of Electric Power Generation, Transmission and
Distribution Industry
For this proposal and the associated analyses, EPA reviewed
facilities classified under the North American Industry Classification
System (NAICS) code 2211. Most recently available census data lists the
size of the industry at 10,330 establishments nationally.\19\ The
Electric Power Generation, Transmission and Distribution (NAICS 2211)
industry is defined as: Facilities primarily engaged in generating,
transmitting, and distributing electric power. Establishments \20\ in
this industry group may perform one or more of the following
activities: (1) Generate electric energy; (2) operate transmission
systems that convey the electricity from the generation facility to the
distribution system; and (3) operate distribution systems that convey
electric power received from the generation facility or the
transmission system to the final consumer.
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\19\ United States Census Bureau, EC1222A1--Utilities:
Geographic Area Series: Summary Statistics for the U.S., States,
Metro Areas, Counties, and Places, 2012.
\20\ Establishment is defined as a single physical location
where business is conducted or where services or industrial
operations are performed. www.census.gov/ces/dataproducts/bds/definitions.html.
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B. Current Industry Practices
Operational and decommissioning practices in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly minimize their impact on human health and the
environment. To consider the potential for releases as part of its
decision making, EPA prepared a high-level review \21\ of industry
practices and the environmental profile of the Electric Power
Generation, Transmission and Distribution industry, which includes a
summary of relevant operational and decommissioning materials and
wastes.
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\21\ Electrical Power Generation, Transmission and Distribution
Industry Practices and Environmental Characterization, June 2019.
---------------------------------------------------------------------------
Electric generating plants convert mechanical, chemical, and/or
fission energy into electric energy. Within this population of electric
generating plants, there are different types of processes employed to
produce electricity (e.g., coal-fired power plants, wind turbines).
Electric power transmission is the bulk transfer of electrical energy
between the point of generation and multiple substations near a
populated area or load center. A distribution substation performs
multiple functions, such as stepping down and stabilizing voltage going
into distribution lines, splitting and routing distribution power in
multiple directions, and disconnecting the transmission grid from the
substation when necessary.
Operation of any power plant requires use of a variety of
nonhazardous materials, including paper, cardboard, wood, aluminum,
containers, packaging materials, office waste, food, municipal trash,
and wastes from equipment assembly and maintenance crews. Potentially
hazardous materials are also frequently used. These materials can
include sandblast media, fuels, paints, spent vehicle and equipment
fluids (e.g., lubricating oils, hydraulic fluids, battery electrolytes,
glycol coolants), among others. Hazardous materials may include, but
are not limited to, asbestos or mercury containing materials,
compressed gases used for welding and cutting, dielectric fluids,
boiler bottom ash, and oils. Process fluids can be either hazardous or
non-hazardous, and can include oily water, spent solvents, chemical
cleaning rinses, cooling water, wash and makeup water, sump and floor
discharges, oily water separator fluids, boiler blowdown, and water
from surface impoundments. Other materials beyond those listed here may
be used in the operation of power plants.
The types of hazardous substances that have been released from
facilities in the Electric Power Generation, Transmission and
Distribution industry include hydrogen fluoride; vanadium, zinc,
copper, and lead compounds; ammonia; and arsenic, cobalt, barium,
cadmium, and selenium compounds. Coal combustion residuals frequently
contain arsenic, selenium, mercury, and other toxic metals. Other
substances beyond those listed here may also have been released from
facilities in the industry.
As detailed in the 2010 ANPRM, most environmental impacts of
electric utilities relate to the fuel sources used to generate electric
power. For example, burning coal at coal-fired power plants generates
ash that contains contaminants like mercury, cadmium and arsenic.
Without proper management, contaminants present in coal ash can pollute
waterways, groundwater, and drinking water. The need for Federal action
to help ensure protective coal ash disposal has been further
highlighted by large spills such as those at the TVA Kingston Plant and
Duke Energy's Dan River Steam
[[Page 36542]]
Station,\22\ which caused widespread environmental and economic damage
to nearby waterways and properties.
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\22\ https://www.epa.gov/tn/epa-response-kingston-tva-coal-ash-spill, https://www.epa.gov/dukeenergy-coalash.
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Electricity delivery can also affect the environment in several
ways. High voltage power switches, inverters, converters, controller
devices and other power electronics contain lead, brominated fire
retardants, and cadmium in their printed circuit boards; these circuit
boards must be managed properly to avoid posing risk to human health or
the environment. Electrical substations and urban manhole facilities
require periodic cleaning, which may yield hazardous waste.
Additionally, insulating materials such as asbestos and polychlorinated
biphenyls (PCBs) must also be managed properly.
Industry practices in certain subsectors, the Fossil Fuel
Generation (221112), Transmission (221121) and Distribution (221122),
of the Electric Power Generation, Transmission and Distribution
industry use more hazardous substances and/or generate larger volumes
of hazardous waste. Several generation subsectors use and generate
lower amounts of hazardous substances or wastes, including
Hydroelectric (221111), Nuclear (221113), Solar (221114), Wind
(221115), Geothermal (221116) and Tidal (221118). Further information
on industry practices is provided in EPA's document ``Electrical Power
Generation, Transmission and Distribution Industry Practices and
Environmental Characterization'' \23\ available in the docket for this
rulemaking.
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\23\ Electrical Power Generation, Transmission and Distribution
Industry Practices and Environmental Characterization, June 2019.
---------------------------------------------------------------------------
Facilities in the electric power generation, transmission and
distribution industry are subject to a wide range of environmental
regulation and enforcement oversight as discussed in Sections VII.B.
and VII.D. below.
C. Industry Economic Profile
Economic trends and financial health in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly address their environmental liabilities.
Circumstances where firms face financial stress can potentially
contribute to the abandonment of facilities and the creation of orphan
wastes sites requiring cleanup. To consider the potential for firms to
default on their financial obligations EPA prepared a high-level
economic profile of the Electric Power Generation, Transmission and
Distribution industry, which includes a summary of relevant financial
metrics, market consolidation and diversification trends, industry
default risks, and accounting standards for environmental liabilities
of entities operating within this industry. This analysis, summarized
in this section, looked at the industry as a whole and additionally
focused on certain subsectors that might be most pertinent to evaluate
for CERCLA 108(b) requirements, including facilities subject to the
2015 Disposal of Coal Combustion Residuals from Electric Utilities
Final Rule (2015 CCR Rule).\24\ The full analysis is found in the
background document for this section available in the docket for this
rulemaking.\25\
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\24\ Hazardous and Solid Waste Management System; Disposal of
Coal Combustion Residuals from Electric Utilities (80 FR 21302,
April 17, 2015).
\25\ CERCLA 108(b) Economic Sector Profile: Electric Power
Generation, Transmission, and Distribution Industry, June 2019.
---------------------------------------------------------------------------
According to the U.S. Census Survey of Business Owners, firms under
NAICS 2211 generated $430 billion in total value of sales, shipments,
receipts, revenue, or business done in 2012. Of this $430 billion, 72
percent came from Electric Power Transmission, Control, and
Distribution, while Electric Power Generation accounted for the
remaining 28 percent. Within Electric Power Generation, fossil fuel
power generation accounted for the largest portion of these values, at
68 percent.
The market structures under which Electric Power Generation,
Transmission and Distribution industry firms operate are varied and
unique to this industry. Firms, their owners/shareholders, and
taxpayers may experience different risk profiles based on the
companies' ownership (privately or publicly held), as well as the
nature of the market in which they operate (regulated or deregulated).
In addition, the Federal Government owns nine power agencies,
accounting for seven percent of net generation and eight percent of
transmission. These federally-owned utilities present an extremely low
risk of default on environmental liabilities. Publicly-owned utilities
also present a low risk of bankruptcy due to detailed financial
reporting requirements and government oversight. Publicly-owned
utilities may also have access to lower-cost forms of financing, such
as tax-free bonds and local low-interest loans. More information on the
numbers of publicly-owned utilities and investor-owned utilities, and
their relative percentages across the industry, is provided in the
background document available in the docket for this rulemaking.\26\
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\26\ Id.
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These utilities can operate in either regulated or deregulated
markets, which also come with financial risk/stability tradeoffs.
Regulated markets are characterized by vertically integrated monopolies
that own and operate all infrastructure and essential components
involved in the delivery of electricity to their customers. Regulated
firms are given reasonable opportunity to recover necessary and prudent
costs in their rates through rate regulation. This generally includes
costs necessary to address environmental liabilities, which are
ultimately covered by the rate-payers. On the other hand, deregulated,
or merchant, markets allow for competition as generation plants sell
wholesale electricity to retail suppliers, who set prices, making the
performance of environmental cleanups more susceptible to market forces
and a firm's ability to pay.
EPA assessed financial ratios, including cash flow-solvency,
profitability, efficiency, and debt risk, for companies in the Electric
Power Generation, Transmission and Distribution industry to examine
trends over time and provide a deeper assessment of the industry's and
companies' financial health. Generally, EPA research finds that the
Electric Power Generation, Transmission, and Distribution industry
remains financially stable. The industry is characterized by
diversified fuel sources and vertical integration, reducing firms'
dependency on any one subsector and strengthening long-term financial
stability. Mergers and acquisitions in recent years have also enhanced
financial stability in the long run by further diversifying large firms
across subsectors. According to the 2018 U.S. Cost of Capital Valuation
Handbook, in recent years the industry experienced less risk and
volatility than the overall market.
Firms in the industry overall remain profitable and able to cover
short-term debt. The data, however, also indicate that larger firms in
the industry tend to be more highly leveraged. For some firms, long-
term liabilities have risen relative to net worth ratios, resulting in
a higher risk of default. While default risk remains relatively low
industry-wide, the data suggest two key risk factors that may threaten
financial stability for some firms: High dependency on coal and nuclear
generation, and rapid market consolidation through mergers and
acquisition.
[[Page 36543]]
For example, some notable bankruptcies in recent years stemmed from
a high dependency on coal and nuclear power generation. Firms more
solely invested in coal or nuclear generation faced more difficulty,
due to their lack of diversification into alternative fuel sources and
lower profit margins.\27\ Nevertheless, the occurrence of bankruptcies
in this industry has historically been far lower than that of many
other industries, and such occurrences remain relatively infrequent.
Further evidence suggests that due in part to factors such as the
significant amount of fixed infrastructure and consumer dependence on
electricity, energy sector firms that default tend to emerge from
bankruptcy and continue to operate rather than fully close. Such
bankruptcies tend to proceed under Chapter 11 relief, for purposes of
debt restructuring. Moreover, in most of these bankruptcies the debtors
have retained their responsibility for environmental liabilities.
Additionally, if the units are continuing to operate, the obligation to
comply with applicable environmental regulations, including the 2015
CCR final rule and any final amendments, will still be required.
Further discussion on bankruptcy experience of this industry, including
evaluation of individual bankruptcy cases, can be found in the
background document to this section found in the docket.\28\
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\27\ For example, Energy Future Holdings Corp. filed for
bankruptcy in 2014, followed by First Energy Solutions in 2018,
after they struggled to make money from coal and nuclear plants in
unfavorable market conditions.
\28\ CERCLA 108(b) Economic Sector Profile: Electric Power
Generation, Transmission, and Distribution Industry, June 2019.
---------------------------------------------------------------------------
Close examination of market structures and typical bankruptcy
restructuring that exist within the Electric Power Generation,
Transmission and Distribution industry suggest that the industry as a
whole should retain the capacity and fiduciary responsibility to pay
the costs of addressing their environmental obligations. In this
industry, publicly-owned utilities subject to rate-setting regulations,
as well as federally-owned utilities, are less likely to default on
liabilities than in other industries. For investor-owned utilities and
those that operate in deregulated markets, bankruptcy code provisions
and legal precedents can provide other protections against the
discharge of environmental liabilities in bankruptcy.
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
As described in the Approach to Developing the Proposed Rule,
Section V above, to evaluate the need for financial responsibility
regulations in the Electric Power Generation, Transmission and
Distribution industry, EPA sought examples of pollution that occurred
under a modern regulatory framework and that required a taxpayer-funded
CERCLA cleanup. In its evaluation, EPA focused first on identifying
response actions at Superfund National Priority List (NPL) sites and
sites using the Superfund Alternative Approach (SAA),\29\ as those are
generally larger cleanups both in terms of amounts of contaminants
removed and costs to carry out these cleanups. EPA also looked at
Superfund removals at non-NPL sites. Beyond these sites in the Federal
Superfund program, EPA included proven CCR damage cases \30\ in its
evaluation, given the prevalence and significance of the CCR damage
cases reviewed for the 2010 ANPRM. Specifically, in that ANPRM, EPA
assessed documented evidence of proven damage due to CCRs in 17 cases
of groundwater contamination and 10 cases of surface water
contamination. EPA noted an additional 40 cases of potential CCR-
related groundwater or surface water contamination.
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\29\ The ``Superfund Alternative Approach (SAA)'' uses the same
CERCLA authority and investigation and cleanup process and standards
that are used for NPL sites. The threshold criteria for using the
SAA are: (1) The site must have contamination significant enough to
make it eligible for listing on the NPL; (2) the site is anticipated
to need remedial action; and, (3) there must be a cooperative,
viable, capable PRP that will sign a CERCLA agreement with EPA to
perform the necessary cleanup.
\30\ CCR are byproducts of the combustion of coal at power
plants by electric utilities and independent power producers. Fly
ash, bottom ash, boiler slag, and flue gas desulfurization materials
are types of CCR. On April 17, 2015, the EPA published a final rule
establishing a comprehensive set of requirements for the disposal of
CCR in landfills and surface impoundments. 80 FR 21302. These
requirements were finalized under the solid waste provisions,
subtitle D, of the Resource Conservation and Recovery Act.
---------------------------------------------------------------------------
To identify the relevant cleanup cases, EPA included NPL sites,
sites using the SAA, and non-NPL sites identified in EPA's Superfund
Enterprise Management System (SEMS) database. EPA also included CCR
damage cases identified as part of the 2015 CCR Rule.\31\ EPA collected
information on the timing and nature of releases or threatened releases
at these sites. Specifically, EPA sought to identify, as applicable,
facility operation end dates, release dates, sources of contamination,
NPL proposal dates, contaminated media, type of contaminant, cleanup
lead, and information on Superfund expenditures at the site. For this
collection, EPA relied on information previously collected as part of
the ANPRM, information available in Superfund site documents (e.g. NPL
listing narratives, Records of Decision, Action Memos, Five-Year
Reviews), and information in SEMS as of March 2018, as well as data for
proven CCR damage cases, and associated site summaries developed for
the 2015 CCR Rule.\32\ The cleanup case identification and site
information collection processes are described in greater detail in the
relevant background documents.\33\
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\31\ The same list of proven CCR Damage Cases used in
promulgation of the 2015 CCR Rule, was also relied upon as the best
available source of data on CCR damage cases at the time that these
CERCLA 108(b) analyses were conducted. The 2015 CCR Rule requires
groundwater monitoring as a first step in a process to monitor and
assess contaminants from CCR units. Facilities must post groundwater
monitoring data on a publicly available website. Utilities are
required to initiate corrective actions should groundwater
exceedances be detected. Any such responses being taken under the
2015 CCR Rule are in early stages, too early to discern if any
impact to taxpayer may result. EPA, therefore, did not evaluate this
data for this proposal.
\32\ Hazardous and Solid Waste Management System; Disposal of
Coal Combustion Residuals from Electric Utilities (80 FR 21302,
April 17, 2015).
\33\ Identification and Evaluation of National Priority List
(NPL) Sites, Sites Using the Superfund Alternative Approach (SAA),
and Coal Combustion Residual (CCR) Cleanup Cases in the Electric
Power Generation, Transmission, and Distribution Industry, June
2019, and Identification and Evaluation of CERCLA 108(b) Electric
Power Generation, Transmission, and Distribution Industry non-
National Priority List (NPL) Removal Sites, June 2019.
---------------------------------------------------------------------------
After compiling information about the risks and history of each
site, EPA sought to identify instances where releases occurred under a
modern regulatory framework and those releases that resulted in Fund-
financed response actions. To do so, EPA's methodology applied
sequenced screens to the identified sites. EPA first sought to screen
out any NPL sites or sites using the SAA where the contaminant release
or cleanup activity occurred before 1980. EPA chose 1980 as a cutoff
point to initially screen out legacy issues because it was the year
that CERCLA was enacted, as well as the date of the initial regulations
under RCRA Subtitle C governing the generation, treatment, storage, and
disposal of hazardous waste. EPA chose to give these significant RCRA
and CERCLA milestones greatest consideration due to the large number of
issues of waste management, land disposal, and soil contamination
identified in the review
[[Page 36544]]
of the NPL and SAA cases. EPA believes the 1980 cutoff point to be a
conservative screen (i.e., retains more sites in the analysis) in that
only the initial RCRA regulations were in place in 1980 and they were
refined, expanded and enhanced several times over the next decades.
Moreover, the Agency's enforcement authorities expanded in the 1980s as
the RCRA program matured. Notably, the passage in 1984 of Hazardous and
Solid Waste Amendments (HSWA) resulted in many regulatory changes and
enhanced enforcement mechanisms.
Next, EPA sought to remove sites where significant Fund
expenditures had not occurred, because response actions that were paid
for by private parties do not support the need for CERCLA Section
108(b) financial responsibility regulations. Using the ``Action Lead''
field in SEMS associated with each site, EPA screened out the
Potentially Responsible Party (PRP) lead sites. This left only the
Mixed Lead Construction or Government Performed Construction sites in
the analysis, consistent with EPA's assessment that at PRP Performed
Construction sites, responsible parties retain responsibility for the
majority of costs. Therefore, PRP Performed Construction sites do not
represent significant expenses to the Superfund.
EPA then reviewed the remaining sites (i.e., those with both
release dates of 1980 or later and Mixed Lead Construction or
Government Performed Construction designation in SEMS) individually in
greater detail. Specifically, EPA considered the site history and each
of the contamination sources at the site in the context of the
regulations that would be applicable to that facility today. A
particularly relevant regulation is the 2015 CCR Rule, which added
significant new requirements to the coal-fired electric utility plants
that dispose of CCR in landfills and surface impoundments. The
promulgation of the 2015 CCR Rule effectively establishes the
introduction of the modern regulatory framework for coal-fired electric
utilities. More information on the regulations EPA considered is
available in Section VII.B. below.
Findings from EPA's analysis of the cleanup cases are discussed
below, with more detailed information available in the ``Identification
and Evaluation of National Priority List (NPL) Sites, Sites Using the
Superfund Alternative Approach (SAA), and Coal Combustion Residual
(CCR) Cleanup Cases in the Electric Power Generation, Transmission, and
Distribution Industry'' background document and the ``Identification
and Evaluation of CERCLA 108(b) Electric Power Generation,
Transmission, and Distribution Industry non-National Priority List
(NPL) Removal Sites'' background document in the docket for this
rulemaking.\34\ The background documents provide the list of sites
identified as well as the information considered in the screening and
review process. Also provided is the list of sites remaining at each
stage of the analysis, as well as the Agency's rationale for each
site's subsequent designation.
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\34\ Identification and Evaluation of National Priority List
(NPL) Sites, Sites Using the Superfund Alternative Approach (SAA),
and Coal Combustion Residual (CCR) Cleanup Cases in the Electric
Power Generation, Transmission, and Distribution Industry, June
2019.
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Using the data sources described above for the Electric Power
Generation, Transmission, and Distribution industry, EPA identified 4
NPL sites and 1 site using the SAA, as well as 24 non-NPL CERCLA
removal action sites,\35\ and an additional 27 proven CCR-related
damage cases \36\ not tracked within Superfund data systems, to
evaluate according to the methodology described above. As described
further below, none of the NPL sites, sites using the SAA, or CCR
damage cases were ultimately considered incidents that occurred under a
modern regulatory framework nor were they incidents where taxpayer
funds were relied upon. For the removal sites, 2 of the 24 cases showed
releases of hazardous substances under a modern regulatory framework
and required taxpayer expenditures, as described below.
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\35\ None of these 24 removal sites are associated with NPL
sites. Removal actions that have taken place at NPL sites or sites
using the SAA, either before or after listing or designation, are
tracked in SEMS as NPL or SAA level actions and not as separate
removal records.
\36\ These 27 proven CCR damage cases represent the final list
of sites at Electric Power Generation, Transmission and Distribution
industry facilities that are not in the Superfund program. Such
sites were included in EPA's evaluation due to the known prevalence
of ground and surface water damages associated with the management
of CCRs. Proven damage cases were relied upon as the highest quality
source of data, selected on the basis of strict criteria where the
subject damages are confirmed as being attributable to Fossil Fuel
Combustion Wastes, based on documented evidence from Scientific
Results, Administrative Rulings, and/or Court Findings.
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The four NPL sites evaluated include two coal-fired power
generation plants with serious CCR contamination, as well as one hydro-
electric facility with PCB contamination and one nuclear power
generator with radiation contamination. The one site using the SAA is a
steam plant that generates electric power from oil-fired burners and
natural gas turbines.
For the four NPL sites, either the dates of contaminant release
were prior to 1980, or the power plants were Federal facilities owned
and operated by the Federal Government. In the case of the one site
using the SAA, no further remedial action is called for and costs for
removal and cleanup were covered by the PRP under its CERCLA agreement
with EPA. As a result, EPA did not undertake a more detailed review of
these sites, as summarized in Table 1 below.
Table 1--Evaluation Results for NPL and SAA Sites in the Electric Power Generation, Transmission and Distribution Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of NAICS 2211 NPL & Detailed review identified a Cases with release(s) under
Total NAICS 2211 NPL & SAA SAA sites screened out based Detailed review concluded possible modern regulation modern regulation that
sites evaluated on pre-1980, or PRP lead release occurred prior to release but no taxpayer required taxpayer funded
status modern regulation expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 5 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Given the small number of NPL and SAA cleanup cases and the
consideration of CCR damage cases for the 2010 ANPRM, EPA chose to
evaluate the potential risk from CCR damage cases. EPA evaluated the 27
proven CCR damage cases identified for the 2015 CCR Rule. Following the
above methodology for identifying modern risk, 17 of the cases were
screened from further consideration because the source of contamination
was determined to
[[Page 36545]]
have occurred prior to 1980, or because the site was designated as a
responsible party lead cleanup. Ten remaining cases were determined to
have occurred after 1980. When these 10 remaining cases were assessed
against today's modern regulatory framework, the releases were all
found to have occurred prior to promulgation of the 2015 CCR Rule \37\
and therefore they were screened from further consideration. As
described in more detail in the Role of Federal and State Programs
section below, the 2015 CCR Rule was specifically designed to contain
requirements that address the risks from coal combustion residue
disposal--leaking of contaminants into groundwater, blowing of
contaminants into the air as dust, and the catastrophic failure of coal
ash surface impoundments, i.e., the sources of contamination identified
in the CCR damage cases. Therefore, although there are examples of
significant releases in more recent years (for example, as recent as
2014 in the case of the Duke Energy breach at Dan River, and 2008 in
the case of a catastrophic dike failure at the TVA Kingston Plant),
those cases still occurred prior to the advent of the new regulatory
standards intended to prevent and remedy these types of incidents.
Although not all provisions of the 2015 CCR Rule have been fully
implemented, EPA believes the requirements in place and those to be
implemented in the coming years sufficiently reduce the risk level at
coal-fired power plants. The 2015 CCR Rule is described further in
Section VII.B.
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\37\ Hazardous and Solid Waste Management System; Disposal of
Coal Combustion Residuals from Electric Utilities, (80 FR 21302,
April 17, 2015).
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The summary results of the analysis of proven CCR damage cases are
presented in Table 2 below.
Table 2--Evaluation Results for CCR Damage Cases in the Electric Power Generation, Transmission and Distribution Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of CCR damage cases Detailed review identified a Cases with release(s) under
Total proven CCR damage cases screened out based on pre- Detailed review concluded possible modern regulation modern regulation that
evaluated 1980, or responsible party release occurred prior to release but no taxpayer required taxpayer funded
lead status modern regulation expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
27 17 10 0 0
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Additionally, EPA chose to look at the major removal cases found in
the SEMS database to supplement this analysis. For this sector, EPA
identified 24 removal sites which were evaluated using the analytic
methodology. Using the methodology, EPA screened out 19 sites because
the environmental releases occurred before 1980 or PRPs led the
response action. To assess the five sites that remained after those
screens, EPA first conducted a detailed review to compare the
environmental issues at the sites to the regulations applicable today.
Based on the detailed review, EPA concluded that the environmental
releases at three of the five remaining removal sites were caused by a
one-time incident (e.g., transformer fire, equipment failure),
resulting in release of PCB transformer oil. Although not designated
PRP-lead actions, according to EPA's record, PRPs financed and
performed the response actions to the satisfaction of EPA at these
sites, and no Fund expenditures occurred.
Regarding the other two removal sites that remained after the
screens, EPA's detailed review indicated that both cases involved long-
term PCB contamination resulting from inappropriate handling and
storage of PCB waste. However, notwithstanding a government-lead
designation in SEMS, neither of these sites required significant
taxpayer expenditure. EPA considered all available history at each site
to determine the level of Fund expenditure. According to EPA's SEMS
expenditure data for English Station power plant in New Haven,
Connecticut (an abandoned coal fired power plant, which operated from
1914 through 1992), the Fund incurred an estimated cost of $17,000,
while the PRP signed a Partial Consent Order \38\ with the state of
Connecticut to spend $30 million to address site contamination
potentially dating back to 1914. Similarly, EPA incurred an estimated
cost of $374,000 for response actions at Commonwealth Utilities
Corporation (CUC) site in the Northern Mariana Islands (a currently
operating facility) after the territory-owned company informed EPA that
it lacked the technical capacity to address the PCB contamination
issues at the site. In this case, EPA did not pursue cost recovery due,
in part, to the PRP's inability to pay. The Fund expenditures for
response action at these two sites were not deemed significant for
purposes of this analysis. More detailed information can be found in
the background document and supporting spreadsheets available in the
docket for this rulemaking. The background document includes the list
of sites identified for analysis, as well as the data and information
considered in the screening and review process. The summary results of
the analysis are presented in Table 3 below.
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\38\ State of Connecticut v. The United Illuminating Company
Partial Consent Order Number COWSPCB 15-001.
Table 3--Evaluation Results for Superfund Removal Sites in the Electric Power Generation, Transmission and Distribution Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of NAICS 2211 Detailed review identified a Cases with release(s) under
Total NAICS 2211 superfund superfund removal cases Detailed review concluded possible modern regulation modern regulation that
removal cases evaluated screened out based on pre- release occurred prior to release, but no taxpayer required taxpayer funded
1980, or PRP lead status modern regulation expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
24 19 0 3 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 36546]]
Prevalent Sources of Risk
EPA's analysis of cleanup cases compiled information, where
discernable, on the root cause of releases. Across the industry
overall, the most prevalent issue was groundwater contamination from
unlined or leaking CCR surface impoundments and landfills. Other
sources of contamination observed at these sites include catastrophic
failures/breaches of dikes, and collapse of dry ash stacks. The common
issues observed at most removal sites were legacy PCB and asbestos
contamination resulting from the handling and disposal of PCB-
containing oil and asbestos-containing insulation materials at fossil
fuel powered electric generation plants.
B. Role of Federal and State Programs and Voluntary Protective Industry
Practices at Facilities in the Electric Power Generation, Transmission
and Distribution Industry
In the January 6, 2010 ANPRM, EPA stated that it recognized that
the NPL data reflect releases arising from activity that, in some
cases, predates CERCLA, RCRA, and other legal requirements and, as
such, the Agency welcomed information about current releases of
hazardous substances to the environment to help inform EPA's future
actions. As discussed in the Approach section of this proposal, to
enable EPA to base its decision on risk posed by facilities operating
under modern conditions, i.e., the types of facilities to which
financial responsibility requirements would apply, EPA developed an
approach to identify and consider relevant state and Federal regulatory
requirements and financial responsibility requirements that currently
apply to operating facilities, as well as voluntary protective
practices. EPA thus undertook an effort to gather information about
Federal and state environmental programs and industry voluntary
programs that have been implemented and are applicable to currently
operating facilities within the Electric Power Generation, Transmission
and Distribution industry today. EPA evaluated the extent to which
activities that contributed to the risk associated with the production,
transportation, treatment, storage, or disposal of hazardous substances
are now regulated. EPA recognizes that substantial advances have been
made in the development of manufacturing, pollution control, and waste
management practices, as well as the implementation of Federal and
state regulatory programs to prevent and address such releases at these
facilities. In part, EPA's proposed decision to not issue financial
responsibility requirements for this industry was determined based on
EPA's review and analysis of Federal regulations and complemented by
state program regulations. Industry voluntary programs were considered
as an additional factor in EPA's proposed decision. EPA's findings and
conclusions about the impact of Federal and state environmental
programs, along with industry voluntary programs, are discussed in the
following section.
Overview of Federal and State Regulatory Programs and Industry
Voluntary Practices Applicable to the Electric Power Generation,
Transmission and Distribution Industry
EPA evaluated Federal and state regulations which address the
potential for release of hazardous substances to the range of
environmental media that may be affected by a release from a facility
in the Electric Power Generation, Transmission and Distribution
industry. EPA found that a comprehensive regulatory framework has
developed since the enactment of CERCLA. Federal statutes such as the
Clean Air Act (CAA), the Clean Water Act (CWA), and RCRA are applicable
across the entire industry and lay the foundation for this regulatory
framework. Specific regulations are discussed in the background
document according to the environmental issues that the regulations
address: Air pollution, water pollution, emergency planning and
response, hazardous substances management, and hazardous and non-
hazardous waste disposal and management. This background document is
located in the docket for this rulemaking.\39\
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\39\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power Generation,
Transmission and Distribution Industry, June 2019.
---------------------------------------------------------------------------
Regulations Addressing Prevalent Sources Identified in Analysis of
Cleanup Cases
EPA's analysis of the cleanup cases found that the most prevalent
releases were:
Groundwater contamination from unlined or leaking CCR
surface impoundments and landfills, catastrophic failures/breaches of
CCR containment dikes, and collapse of dry ash stacks;
PCB contamination from the handling and disposal of PCB-
containing oil; and
asbestos contamination from handling and disposal of
asbestos-containing insulation.
CCR is one of the largest industrial waste streams generated in the
United States. CCRs are residuals from the combustion of coal at coal-
fired power plants; they consist of fly ash, bottom ash, boiler slag,
and flue gas desulfurization materials. Approximately 110 million tons
of CCR was generated in 2012.\40\ The disposal of CCR is subject to
recent regulation under the Agency's 2015 CCR Rule.\41\ EPA promulgated
the rules for CCR disposal under RCRA Subtitle D. The 2015 CCR Rule
addresses risks from CCR disposal identified in these cases--leaking of
contaminants into groundwater, blowing of contaminants into the air as
dust, and the catastrophic failure of CCR surface impoundments such as
what occurred at TVA's Kingston Plant--by adding new requirements for
CCR landfills and surface impoundments. In any cases where releases
might occur, the 2015 CCR Rule includes both closure and corrective
action provisions that could be used to remedy those releases. These
regulations establish minimum national criteria for existing and new
CCR landfills, existing and new CCR surface impoundments, and lateral
expansions of these units including: Location restrictions, design and
operating criteria, groundwater monitoring and corrective action,
closure and post closure care requirements, as well as recordkeeping,
notification, and internet posting requirements. These regulatory
requirements are designed specifically to prevent the types of risks
from CCR that have occurred in the past. EPA did not establish
financial assurance requirements as part of the CCR rule.\42\
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\40\ See 80 FR 21303 (April 17, 2015).
\41\ See 80 FR 21301.
\42\ In the proposal for the 2015 CCR Rule the Agency stated
that the RCRA subtitle D alternative did not include proposed
financial responsibility requirements and that any such requirements
would be proposed separately. The Agency solicited comment on
whether financial responsibility requirements under CERCLA Section
108(b) should be a key Agency focus under a RCRA subtitle D
approach. While the Agency received numerous comments urging the
Agency to establish financial responsibility as part of the subtitle
D option, the CERCLA Section 108(b) option did not receive
significant support. EPA did not require financial assurance
requirements as part of the 2015 CCR Rule and committed to continue
to investigate the use financial responsibility requirements under
other statutory authorities.
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EPA recognizes that the 2015 CCR Rule is not yet fully implemented
at this point, although rule implementation is ongoing. While the rule
became effective in 2015, it established timeframes for the technical
criteria
[[Page 36547]]
based on the amount of time needed to implement the requirement. Thus,
for some requirements implementation is complete, and for other
requirements, activities are ongoing. The implemented standards
themselves have materially reduced risk by, for example, imposing
structural integrity criteria on surface impoundments holding CCR to
help prevent damages that would occur if the unit's embankment or dike
failed structurally, such as the dike failure at the TVA Kingston Plant
in 2008. One of these criteria is that the surface impoundment must be
assessed to demonstrate that the unit design and operation meet minimum
factors of safety, and if the unit does not, the surface impoundment
must be closed. The deadline to complete this initial assessment was
2016 or 2108, depending on designations in the rule, and represents an
important rule protection that has been implemented.\43\
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\43\ The 2015 CCR Rule requires that operating surface
impoundments must be re-assessed every five years to ensure that the
unit remains structurally sound.
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An example of an important risk-reducing requirement of the 2015
CCR rule for which implementation is ongoing is the requirement for
groundwater monitoring and corrective action. Owners and operators of
landfills and surface impoundments holding CCR are required to install
a system of monitoring wells to detect releases of hazardous
constituents from the units. If this monitoring shows an exceedance of
a groundwater protection standard for specific constituents, corrective
action must be taken to remedy the contamination. The groundwater
monitoring and corrective action program is an example of a requirement
that is ongoing but has already provided meaningful protection by
identifying issues and requiring corrective action. Based on
information made publicly available by electric utilities, current
groundwater monitoring results show that a significant percentage of
the electric utilities will need to implement the rule's corrective
action program. At this point, electric utilities are at the early
stages of implementing the corrective action program.
The 2015 CCR Rule also established timelines and standards for
closure and post-closure care. Specifically, the rule requires all CCR
units to close in accordance with specified standards and to monitor
and maintain the units for a period of time after closure, including
the groundwater monitoring and corrective action programs. These
criteria help ensure the long-term safety of closed CCR units. EPA
expects, based on information made publicly available by the electric
utilities, that a significant percentage of CCR surface impoundment
will begin closing in the coming years. A small percentage of CCR units
have already completed closure under the rule.
As described here, the 2015 CCR Rule is not yet fully implemented;
however, the activities associated with the deadlines that have already
passed have already reduced risk from coal-fired power plants,
including that of a Superfund response being necessary. Moreover, EPA
expects that activities associated with the ongoing CCR rule compliance
will further reduce risk at these facilities as units are closed in
accordance with the prescribed standards and corrective actions taken.
Contamination from PCBs and asbestos is largely addressed by toxic
substances management regulations under the authority of the Toxic
Substances Control Act (TSCA). TSCA provides EPA with authority to
issue rules requiring reporting, record-keeping, and testing of
specific chemicals and to establish regulations that restrict the
manufacturing (including import), processing, distribution in commerce,
use, and disposal of chemicals and mixtures. TSCA authorizes EPA to
prevent unreasonable risks by regulating chemicals and mixtures,
ranging from hazard warning labels to the outright ban on the
manufacture, processing, distribution in commerce or use of certain
chemicals and mixtures. TSCA and its amendments have also established
specific programs for the management of certain chemicals--namely,
PCBs, asbestos, radon, lead, mercury, and formaldehyde.
TSCA section 6(e) establishes a set of requirements that apply
throughout the lifecycle of PCBs. Specifically, TSCA prohibits the
manufacturing, processing, distribution in commerce, and use of PCBs,
except under certain exclusions, exemptions, and authorizations.
Regulations implementing TSCA section 6(e), found in 40 CFR part 761,
contain certain criteria through which EPA may obtain additional
knowledge of the PCB universe. For example, the regulatory use
authorization for PCB Transformers generally require owners to register
those transformers with EPA. TSCA also established EPA's authority to
promulgate rules to prescribe methods for the disposal of PCBs. The
TSCA PCB regulations include storage and disposal requirements for
specific types of PCB waste which are designed to prevent unreasonable
risk of injury to health or the environment. These regulations may
dictate comprehensive requirements, such as verification sampling and
financial assurance, or may provide for the issuance of an approval
(permit) which takes into account factors specific to the facility and
serves as an enforceable document that governs PCB activities at that
facility. In particular, the PCB regulations provide for the cleanup
and disposal of PCB remediation waste through self-implementing
provisions, performance-based disposal requirements, and site-specific
risk-based approvals. Cleanup and disposal requirements can include
notification, sampling, approval requirements, and institutional
controls. Regulatory notification provisions for PCB waste activities
require facilities to notify EPA of specific PCB activities, including
transportation, disposal, storage, R&D/treatment, and certain
generation. All affected PCB waste is manifested from the generator to
final disposal.
Regulation of asbestos is similarly rigorous. Numerous laws and
regulations control the use of asbestos and direct procedures for
asbestos abatement. Under TSCA, in 1989, EPA imposed a partial ban on
the manufacture, import, processing, and distribution of some asbestos-
containing products, and in the April 2019 Significant New Use Rule
\44\ ensured that other discontinued uses of asbestos cannot reenter
the marketplace without EPA review. OSHA has promulgated standards for
asbestos exposure in work under 29 CFR 1926.1101. This part sets
permissible exposure limits, set standards for restriction of access to
regulated areas and require employers to provide respirators for
employees in those areas, implement monitoring and exposure assessment
testing and frequency requirements, and prescribe engineering controls
and work practices for operations to come into compliance.
Additionally, EPA's Asbestos Worker Protection Rule, promulgated under
the authority of the TSCA, extends these worker protections to state
and local government employees involved in asbestos work who are not
covered by OSHA's asbestos regulations. Asbestos demolition methods are
separately regulated by the Asbestos National Emission Standards for
Hazardous Air Pollutants (NESHAP) regulation under the Clean Air Act.
The Asbestos NESHAP established requirements that apply to asbestos
removal, transportation, and disposal practices from a variety of
sources, and is intended to minimize the release of
[[Page 36548]]
asbestos fibers during activities involving the handling of
asbestos.\45\
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\44\ Restrictions on Discontinued Uses of Asbestos (84 FR 17345,
April 25, 2019).
\45\ See https://www.epa.gov/asbestos/overview-asbestos-national-emission-standards-hazardous-air-pollutants-neshap#was.
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State Regulatory Programs
Some state regulations impose requirements on the Electric Power
Generation, Transmission, and Distribution industry in addition to
Federal regulatory requirements. The requirements of current state
programs can reduce risk at facilities that manage hazardous
substances. EPA researched key state environmental regulations relevant
to the Electric Power Generation, Transmission and Distribution
industry from states representative of the geographic distribution of
facilities. In many cases, states have adopted Federal regulations or
incorporate them by reference into state administrative codes. In other
cases, states have promulgated their own regulatory regimes that expand
on or are more stringent that analogous Federal regulations or
implement standalone state regulations. A detailed discussion of state
regulations, as well as the methodology EPA used in selecting the 25
states that it researched, is available in the regulation summary
background document in the docket for this rulemaking.\46\
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\46\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power Generation,
Transmission and Distribution Industry, June 2019. To summarize the
state regulatory framework relevant to fossil fuel electric power
generation facilities, EPA first determined the geographic
distribution of fossil fuel power plants and determined which states
contain over 50 percent of these facilities in the United States.
Those states are: Pennsylvania, Michigan, Indiana, Illinois,
Missouri, Texas, Kentucky, Iowa, Ohio, Wisconsin, Florida,
Minnesota, and North Carolina. For a description of EPA's
methodology in determining relevant state regulations, see Appendix
I. For a comprehensive summary of the relevant state regulations
that EPA located, see Appendix III.
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States regulations relevant to the Electric Power Generation,
Transmission and Distribution industry primarily focus on air
pollution. State air regulations are an example of state regulations
that set standards that are stricter than Federal regulations.
Specifically, states may set air emission standards for emissions other
than the six criteria pollutants regulated under the CAA, such as
mercury, volatile organic compounds, and visible air emissions. Some
states, such as Wisconsin, have issued emission limitation and
technology standards for facilities constructed before the
implementation of Federal new source requirements; those sources are
exempt from the Federal source performance standards.
In addition, state regulations relevant to the Electric Power
Generation, Transmission and Distribution industry primarily focus on
the management and disposal of CCR wastes. More than half of U.S.
states had implemented some form of their own CCR-related monitoring,
design/siting, and/or inspection requirements beyond those called for
at the Federal level, prior to promulgation of the 2015 CCR Rule.
Additionally, most states have been authorized to implement the RCRA
Subtitle C program, which applies to certain facilities and waste
streams in the Electric Power Generation, Transmission and Distribution
industry. For specific substances and operational practices, some
states with authorized RCRA programs have imposed requirements that are
more stringent than the Federal regulations.
EPA's review of current Federal and state regulations indicates
that a framework of requirements is being implemented, that reduces the
risks posed by operating facilities in the Electric Power Generation,
Transmission and Distribution industry. This risk reduction is critical
to understanding ``the degree and duration of risk associated with the
production, transportation, treatment, storage, or disposal of
hazardous substances'' as well as the risk to taxpayers of being
required to fund response activities under CERCLA, and thus is a
primary factor leading to EPA's proposed decision to not issue
financial responsibility requirements for this industry.
Industry Voluntary Practices
EPA reviewed facility Risk Management Plans, industry materials,
government literature and academic literature to locate voluntary
programs that: (1) Attempt to address CERCLA hazardous substance
management, disposal and release prevention, mitigation and response;
(2) are relevant to fossil fuel electric power facilities; and (3) in
which fossil fuel electric power facilities participated. Industry
voluntary programs fall into three categories: Those sponsored by
Federal, state, or local governmental agencies; those fostered within
industry associations or non-governmental organizations; and those
implemented by individual firms. Some of these programs set discharge,
emissions and safety standards that supplement Federal and state
standards and may come with a certification from the government agency
or industry group that promotes the standards. Other programs solicit
reporting on emissions or other data in order to publish industry
performance reports. EPA's review of available studies found that the
industry voluntary programs can be effective at reducing both pollution
and the frequency of government enforcement actions. A detailed
discussion of industry voluntary practices, as well as the methodology
used by EPA, is available in Section II. Industry Voluntary Programs of
the regulation summary background document in the docket for this
rulemaking.\47\
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\47\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Facilities in the Electric Power Generation,
Transmission and Distribution Sector, June 2019.
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C. Existing State and Federal Financial Responsibility Programs
To help inform the level of risk associated with classes of
facilities in the Electric Power Generation, Transmission and
Distribution industry, EPA reviewed existing state and Federal
financial responsibility (FR) programs that may be applicable to the
industry and that cover a wide range of liabilities including, closure,
post-closure care, corrective action, third-party personal injury/
property damage, and natural resource damages. EPA focused on these
types of FR programs for two reasons. First, these categories of
damages, actions and costs are like those that could be covered by
CERCLA Section 108(b) rulemaking and thus they help inform the need for
CERCLA Section 108(b) FR for this industry. Secondly, the existence of
FR requirements can help create incentives for sound practices,
reducing the risk of releases requiring CERCLA response action. EPA
also sought to identify state cleanup funds that are at least partially
funded by industry (e.g., through a tax on hazardous wastes generated),
and that could cover future CERCLA liabilities that may arise at
electric power facilities. EPA's report focused on the 25 states
reviewed in EPA's reports on existing state regulatory and voluntary
programs (excluding FR programs) that may be applicable to electric
power facilities. Finally, EPA reviewed existing FR requirements in the
following Federal programs: (1) RCRA Subtitle C Treatment, Storage,
Disposal Facilities; (2) TSCA commercial PCB waste facilities; (3) EPA
Safe Drinking Water Act Underground Injection Control wells; (4) U.S.
Nuclear Regulatory Commission (NRC) requirements for decommissioning
nuclear power reactors; and (5) NRC
[[Page 36549]]
insurance requirements for nuclear incidents. The report is available
in the docket for this rulemaking.\48\
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\48\ Review of Existing Financial Responsibility Laws
Potentially Applicable to Classes of Facilities in the Electric
Power Generation, Transmission, and Distribution Industry, June
2019.
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EPA identified a range of existing FR programs that may be
applicable to facilities in the Electric Power Generation, Transmission
and Distribution industry. These programs include the Federal programs
mentioned above as well as state programs related to:
Cleanup or corrective action financial assurance for
discharges/releases of hazardous waste or hazardous constituents
Facility remediation FR associated with transfer in ownership
or facility closure
FR for storage tanks containing hazardous substances
FR included in enforcement orders to assure compliance
FR specific to coal-fired electric generating facilities
FR specific to facilities that process or dispose of coal
combustion residuals, for example, in coal ash ponds and/or landfills
FR found in land use/siting permit conditions
The applicability of these programs will depend on a variety of
facility-specific factors, for example, use of a specific piece of
equipment (e.g., ownership of an underground storage tank that contains
regulated substances) or engagement in a specified activity (e.g., a
release of a hazardous substance). Furthermore, state financial
responsibility programs vary by state and some types of FR programs
exist only in subsets of the states reviewed. However, a majority of
the states reviewed, 20 of the 25, had financial responsibility
programs in place that cover the processing or disposal of coal
combustion residuals. EPA believes that state and Federal FR programs
help reduce risk at facilities where they are applicable.
D. Compliance and Enforcement History
To understand the experience of courts settlements and judgments,
EPA looked at compliance and enforcement in the Electric Power
Generation, Transmission and Distribution industry. Compliance
assistance, monitoring, and enforcement are important components of the
regulatory framework discussed above. Through inspections, compliance
monitoring can identify noncompliance at regulated facilities.
Enforcement actions impose legal instruments to ensure correction of
deficiencies and achieve compliance with environmental requirements.
Compliance and enforcement actions have certain functions which EPA
considers particularly pertinent to the risk determination for
rulemaking under CERCLA Section 108(b). First, through negotiated
agreements, EPA can ensure that the responsible party carries out or
pays for the cleanup in the event that noncompliance causes release of
a hazardous material. Second, enforcement actions can compel a
responsible party to return to compliance through instruments such as
settlements and orders. Third, the prospect of financial penalties that
can accompany these enforcement instruments can encourage compliance.
All of these functions support the regulatory structure in reducing
risk of Fund expenditures. EPA looked at applicable enforcement
authorities as well as historical enforcement and compliance data in
the development of this proposal.
EPA obtained data from the EPA Enforcement and Compliance History
Online (ECHO) system to provide a review of Federal enforcement from
FY1973 through FY2017.\49\ Facilities whose primary NAICS codes
indicate Electric Power Generation, Transmission and Distribution
industry activities (NAICS 2211) were included in EPA's review. ECHO
data show that initiatives and normal review or inspection of
facilities resulted in over 2000 enforcement cases in the Electric
Power Generation, Transmission and Distribution industry from FY1974
through FY2017. CAA (62%) and CWA (12%) cases were the most common.
There are a dramatically smaller number of cases in RCRA (6%), CERCLA
(5%), and the Emergency Planning and Community Right-to-Know Act
(EPCRA) (4%). Further description of this review, which includes
details on the topics summarized in this section, is available in the
background document ``Enforcement, Court Settlements and Judgments in
the Electric Power Generation, Transmission and Distribution Industry''
in the docket for this rulemaking.
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\49\ ECHO does not include all of EPA's compliance and
enforcement activity because regions are not required to report
``informal actions,'' and it does not consistently capture all state
actions.
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1. Relevant Industry-Specific Focused Federal Enforcement Initiatives
One way that EPA's Office of Enforcement and Compliance Assurance
focuses enforcement and compliance resources on the most serious
environmental violations is with enforcement initiatives that develop
and implement national program priorities. Enforcement initiatives are
an important tool for identification of noncompliance and subsequent
actions to compel return to compliance. Additionally, these initiatives
emphasize use of the full range of compliance assurance tools, not only
enforcement, and can thereby reduce risk by helping facilities prevent
releases that might otherwise be caused by noncompliance. In recent
years, facilities in the Electric Power Generation, Transmission and
Distribution industry were included in two initiatives:
a. Ensuring Energy Extraction Sector Compliance With Environmental Laws
This initiative focuses on significant public health and
environmental problems, including exposure to significant releases of
volatile organic compounds, reducing CAA non-attainment, and reducing
water quality impairment. The background document \50\ details some of
the relevant initiative inspection and NAICS 2211 enforcement results
from FY2011 through FY2017.
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\50\ Enforcement, Court Settlements and Judgments in the
Electric Power Generation, Transmission and Distribution Industry,
June 2019.
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b. Reducing Air Pollution From the Largest Sources
This initiative focused on ensuring that large industrial
facilities, like coal fired power plants, comply with the Clean Air Act
when building new facilities or making modifications to existing ones.
This initiative benefited human health and the environment with
significant cuts in air emissions, especially from coal fired power
plants, since it began in 2005.
2. Enforcement of Recent Electric Power Generation, Transmission and
Distribution Industry Federal Requirements
At the time of promulgation, EPA lacked the authority to enforce
the 2015 CCR Rule.\51\ Enforcement was by citizen suits only, although
the Agency could use its authorities under RCRA Sec. 7003 to address
conditions that may present an ``imminent and substantial
endangerment.'' The Water Infrastructure Improvements for the
[[Page 36550]]
Nation (WIIN) Act \52\ was signed in December of 2016 and expanded the
enforcement authorities available to EPA. The Act states that EPA may
use its information gathering and enforcement authorities under RCRA
Sections 3007 and 3008 to enforce the 2015 CCR Rule or permit
provisions.\53\ At this time, no cases of Federal enforcement of this
regulation have yet been concluded.
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\51\ The 2015 CCR Rule was promulgated under Subtitle D of RCRA,
and at the time of rule promulgation in 2015, it did not require the
states to adopt or implement the regulations or to develop a permit
program. It also did not provide a mechanism for EPA to approve a
state permit program to operate ``in lieu of'' the Federal
regulations.
\52\ Public Law 114-322.
\53\ Section 2301 of the WIIN Act, 42 U.S.C. 6945(d), amended
RCRA to allow States to submit permit (or other system of prior
approval and conditions) programs to EPA for approval. The Act
states that if a state CCR permitting program is approved by the
Agency (known as a participating state), those permits will operate
``in lieu of'' the Federal regulations in part 257. The Act states
that EPA will develop permits for those units located in tribal
lands and, if given specific appropriations, EPA will develop a
permitting program for those units located in non-participating
states.
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a. Review of Enforcement Response Actions
Enforcement cases can include instances where removal action,
release reduction, or return to compliance include the removal of
contaminated media by the responsible party. Measures to remove
contamination may be required in enforcement orders under the range of
environmental statutes and are negotiated to require activities aligned
with return to compliance.\54\ In this situation, taking an enforcement
action directly reduces risks to human health and the environment.
During the period FY2012 through FY2017, 14 settled Electric Power
Generation, Transmission and Distribution industry enforcement cases
were identified as those where removal of contaminated media occurred.
Six of these are CERCLA cases and five are CWA cases. One CAA and two
TSCA cases are also included.
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\54\ These ECHO enforcement removals are separate from the
Superfund removals analyzed elsewhere. ECHO system data includes the
combined value of total enforcement financial penalties,
Supplemental Environmental Projects (SEPs), and associated
compliance activity.
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The substances removed are generally categorized as metals,
hydrocarbons, and hazardous chemicals. These cleanups arising from
Federal enforcement actions mitigated risks to human health and the
environment by removing soils, groundwater, and sediments contaminated
by a variety of substances, and reduced likelihood of impact to the
Fund.
b. Total Value of Enforcement Settlements and Judgments
Settlements and judgments in enforcement cases can result in
financial penalties, supplemental environmental projects (SEPs), and
activities required to return to compliance.\55\ Enforcement
settlements and judgments can ensure that the responsible party
conducts or pays for cleanup, drive a return to compliance, and
incentivize compliance. For all enforcement cases from FY1974 through
FY2017 in the Electric Power Generation, Transmission and Distribution
industry, the total penalties recovered are over $415 million, the
total value of SEPs is over $129 million, and the total compliance
activity estimates are over $34.2 billion, all in 2017 inflation-
adjusted dollars.
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\55\ Compliance actions ordered can include the removal of
contaminated media, installation of new equipment, or implementation
of compliant processes.
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3. Review of Major CERCLA and RCRA Cases
As stated in the cleanup site evaluations in Section VII.A.,
particular consideration was given to CERCLA and RCRA regulations as
relevant components of the modern regulatory framework that applies to
the Electric Power Generation, Transmission and Distribution industry.
There have been over 224 CERCLA and RCRA cases brought in this
industry, beginning in 1984. The ten largest CERCLA or RCRA enforcement
settlements and judgments for the Electric Power Generation,
Transmission and Distribution industry have 2017 inflation-adjusted
values ranging from over $250,000 to $1.1 billion. Further discussion
of the details on the Federal actions for these and additional criminal
cases can be found in the background document ``Enforcement, Court
Settlements and Judgments in the Electric Power Generation,
Transmission and Distribution Industry.'' This document identifies
facilities where noncompliance was identified and was addressed by
means of formal Federal enforcement. The scope of the background
document does not include either facilities where noncompliance was
addressed through informal enforcement, facilities where noncompliance
was addressed by a state, or facilities that are in compliance.
The compliance and enforcement actions documented here and in the
background document show that where noncompliance is identified, the
preponderance of industry responsible parties are conducting or paying
for cleanups, returning to compliance, and improving public health and
the environment. Although enforcement actions alone do not completely
supplant the need for Fund-financed response actions in the Electric
Power Generation, Transmission and Distribution (as discussed in
section VIII, below), effective criminal, administrative and judicial
enforcement demonstrates proper functioning of this component of the
modern regulatory framework. Enforcement thus serves as a complementary
element supporting the overall conclusion that CERCLA 108(b) financial
assurance is not necessary.
VIII. Decision To Not Propose Requirements
Based on consideration of the analyses described in the previous
sections, EPA has reached a conclusion that the degree and duration of
risk posed by the Electric Power Generation, Transmission and
Distribution industry does not warrant financial responsibility
requirements under CERCLA Section 108(b) and thus is proposing to not
issue such requirements. The analysis and proposed finding in this
proposal are not applicable to and do not affect, limit, or restrict
EPA's authority to take a response action or enforcement action under
CERCLA at any facility in the Electric Power Generation, Transmission,
and Distribution Industry, including any currently operating facilities
or those described in this proposal and in the background documents for
this proposal, and to include requirements for financial responsibility
as part of such response action. The set of facts in the rulemaking
record related to the individual facilities discussed in this proposed
rulemaking support the Agency's proposal not to issue financial
responsibility requirements under Section 108(b) for this class, but a
different set of facts could demonstrate a need for a CERCLA response
action at an individual site. This proposed rulemaking also does not
affect the Agency's authority under other authorities that may apply to
individual facilities, such as the CAA, the CWA, RCRA, and TSCA.
EPA believes the evaluation of the Electric Power Generation,
Transmission and Distribution industry demonstrates significantly
reduced risk at current Electric Power Generation, Transmission and
Distribution operations. The reduction in risks due to the requirements
of existing regulatory programs and voluntary practices combined with
reduced costs to the taxpayer, demonstrated by EPA's cleanup case
analysis, existing financial responsibility requirements, and
enforcement actions, reduce the need for federally-financed response
action at facilities in the Electric Power
[[Page 36551]]
Generation, Transmission and Distribution industry. EPA looked at
current industry practices, market structure and economic performance
of the industry; analyzed cleanup cases and CCR proven damage cases for
facilities in the industry to identify risk; evaluated the extent to
which the industry and sources of releases are covered by a modern
regulatory framework, the degree to which taxpayers have been called
upon to pay for cleanup, and EPA enforcement history in the industry.
As discussed in Section VII.A., EPA identified a small number of
cleanup cases that occurred under a modern regulatory framework and
also entailed some Fund expenditure. Overwhelmingly, however, the
industry was found to be practicing responsibly within the current
regulatory framework, with just 2 sites out of the 10,330
establishments in the industry indicating a significant impact to the
Fund under a modern regulatory framework. The language in Section
108(b) on determining the degree and duration of risk and on setting
the level of financial responsibility confers a significant amount of
discretion on EPA. It is EPA's assessment that the small set of
federally-funded cleanup cases due to recent contamination does not
warrant the imposition of financial responsibility requirements on the
entire Electric Power Generation, Transmission and Distribution
industry under CERCLA Section 108(b).
EPA's analysis of Superfund cleanup cases, supplemented by a review
of CCR damage cases, found that the most prevalent source of
contamination stemmed from unlined or leaking CCR surface impoundments
and landfills. Requirements under the newly-imposed regulatory
structure of the 2015 CCR Rule specifically target this CCR risk,
minimizing the likelihood of future contamination from this source
incurring liabilities to the Fund. EPA believes the 2015 CCR rule
requirements, both those implemented and those with ongoing
implementation, significantly reduce the risk of a Superfund response
being necessary at these facilities. The Agency believes this risk
reduction is particularly notable in light of coal fired power plant
sector's minimal impact on Superfund resources to date as indicated by
the review of NPL, SAA and removal sites associated with the sector.
The analysis of removal cases found PCB and asbestos contamination
to be the leading causes of removal actions in the industry. The
current regulatory framework, including application of the TSCA and
RCRA regulations, limits the use of these contaminants and requires
both proper disposal and cleanup of these contaminants when releases do
occur.
EPA acknowledges that regulations do not always prevent releases,
and the risk of a release is lessened but never eliminated by existing
Federal and state environmental regulations. However, EPA believes that
the network of Federal and state regulations creates a comprehensive
framework that applies to prevent releases that could result in a need
for future cleanup. In addition, enforcement settlements and judgments
that force return to compliance are effective components of the
applicable regulatory structure. EPA's analysis of enforcement history
shows that enforcement of the applicable regulations provides a lever
to monitor compliance, obtain responsible party cleanups, and recover
financial penalties. Federal and state regulatory programs, backed up
by effective enforcement and complemented by industry voluntary
practices, have improved public health and the environment
significantly since CERCLA's initial adoption over 40 years ago. EPA
believes within the Electric Power Generation, Transmission and
Distribution industry this framework provides effective controls which
protect human health and the environment.
Examination of market structures for the Electric Power Generation,
Transmission and Distribution industry further indicates comparatively
low likelihood of default on environmental obligations at the expense
of taxpayers and the government by companies in this industry. This
economic performance combined with the low impact to the Fund by
facilities with releases that happened under the modern regulatory
framework, suggests that the degree of risk to the Fund by this
industry does not rise to a level that warrants CERCLA Section 108(b)
financial responsibility requirements.
For these reasons, EPA is proposing today to not issue financial
responsibility requirements under CERCLA Section 108(b) for this
industry.
A. Solicitation of Public Comment on This Proposal
EPA solicits comments on all aspects of this proposal. EPA is
specifically interested in receiving comments on several issues and
requests the following information:
Examples of Electric Power Generation, Transmission and
Distribution industry related response actions related to releases
which took place under the modern regulatory framework where
potentially responsible parties (PRPs) did not lead the response at the
facility.
Examples of Electric Power Generation, Transmission and
Distribution industry related response actions related to releases
which took place under the modern regulatory framework where PRPs have
not taken financial responsibility for their environmental liabilities.
Information on state-lead or other Federal agency cleanups
or instances of natural resource damages associated with this industry
that may supplement the information on cleanups gathered and analyzed
for this proposal.
Information about existing Federal, state, tribal, and
local environmental requirements for the Electric Power Generation,
Transmission and Distribution industry relevant to the prevention of
releases of hazardous substances that were not evaluated as part of
this proposal.
Information about financial responsibility requirements
applicable to the Electric Power Generation, Transmission and
Distribution industry that were not evaluated as part of this proposal.
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review, because it may
raise novel legal or policy issues [3(f)(4)]. Any changes made in
response to OMB recommendations have been documented in the docket for
this rulemaking. EPA did not prepare an economic analysis for the
proposed rule, since this action imposes no regulatory requirements.
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
This proposed rule is not subject to the requirements of Executive
Order 13771 (82 FR 9339, February 3, 2017) because this proposed rule
would not result in additional cost.
C. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA, because this action does not impose any regulatory
requirements.
[[Page 36552]]
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments, because this action does not impose any regulatory
requirements.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the Federal Government and the states, or on the distribution of power
and responsibilities among the various levels of government, since this
action imposes no regulatory requirements.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175, because this action imposes no regulatory
requirements. Thus, Executive Order 13175 does not apply to this
action.
H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866, and
because EPA does not believe the environmental health or safety risks
addressed by this action present a disproportionate risk to children,
since this action imposes no regulatory requirements.
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy, since this action imposes no regulatory
requirements.
J. National Technology Transfer and Advancement Act
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
EPA believes that this action is not subject to Executive Order
12898 because it does not establish an environmental health or safety
standard, since this action imposes no regulatory requirements.
List of Subjects in 40 CFR Part 320
Environmental protection, Electric power, Financial responsibility,
Hazardous substances.
Dated: July 2, 2019.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2019-15094 Filed 7-26-19; 8:45 am]
BILLING CODE 6560-50-P
