In Georgia, ratepayers face a big bill for coal ash cleanup, while a utility profits

This story is part of a 12-part investigation by the Chicago Investigative Project in the graduate program at the Medill School at Northwestern University.

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Plant Bowen’s cooling towers dominate the horizon east of Taylorsville Elementary School in Stilesboro, Georgia. They’re visible from 5 miles north at a boat slip in Euharlee, where paddlers push off into the Etowah River, and they form the backdrop for homes in each of the surrounding towns. 

Hard to spot, however, are the enormous ponds where Georgia Power stores the waste from the coal burned in Plant Bowen. Indeed, the plant is one of Georgia’s largest coal-fired power generation facilities and the source of the 20.4 million cubic yards of ash stored on site — enough to fill more than 6,000 Olympic-size swimming pools. 

The coal ash itself is filled with toxic chemicals like arsenic, mercury, lead, and chromium, but is not designated by the U.S. Environmental Protection Agency as hazardous waste.

Now, the power company in charge has begun cleaning up its ash ponds across the state, as federal rules require. But more than two million energy-consuming households are on the hook for the cleanup cost. 

A 2019 decision by the state’s utility regulators allowed plant owner Georgia Power to charge the first $525 million in ash pond closure costs to customers. Georgia Power, which owns nearly all the state’s coal ash sites, estimates its total coal ash closure and monitoring costs will be nearly $9 billion, a utility spokesperson said. Georgia Power analysts expect they will request an additional $1.1 billion in coal ash closure reimbursement from customers over the next three years.

Plant Bowen, an hour northwest of Atlanta, is the site of the state’s largest ash pond. Georgia’s 29 coal ash sites hold more than 92 million tons of waste, according to environmental groups’ analysis of data reported by companies.

There are over 700 coal ash repositories nationwide, many of them unlined ash ponds like Plant Bowen’s, and many of them contaminating groundwater through seepage of dangerous chemicals. Under federal rules adopted by the EPA in 2015, companies must develop closure plans for ash ponds and prevent groundwater contamination. Environmental watchdogs typically argue that ash should be removed from unlined ponds entirely and transported to lined landfills, or reused as an ingredient in concrete or other building materials. 

In January, the EPA indicated to state regulators and utility companies that it would start enforcing the 2015 rules, which thus far had sparked little government action.

On Jan. 11, EPA regulators sent a letter to the Georgia Environmental Protection Division, saying the state’s ash ponds may need to be excavated.

In June, Georgia Power announced that it will excavate 9 million out of 20 million tons of stored ash at Plant Bowen for “beneficial reuse,” the largest such project in the U.S. Georgia Power now intends to excavate more of its ash than originally planned, removing ash from 20 of its 29 impoundments. 

But that excavation is expensive. Meanwhile, Georgia Power collects a 10.5% profit margin on investments the utility makes, including coal ash cleanup. The rate was approved by the state’s Public Service Commission, even though the commission staff had suggested a 9.5% return, in line with national averages for utility companies. 

Georgia Power’s situation represents one of the conundrums created by the nation’s coal ash problem: When companies do take the most protective route — reuse or removal to landfills — ratepayers sometimes pick up a massive tab. 

Problem or solution? 

Environmental advocates generally agree that beneficial reuse is a positive move, keeping ash out of landfills and reducing the need for greenhouse gas-intensive cement to make concrete. But they have mixed feelings about the Plant Bowen beneficial reuse plan, and not only because of the cost. 

Georgia Power’s new plan will keep Plant Bowen in operation past 2028, when the rest of the company’s coal-powered plants are scheduled to shut down or convert to other fuel sources. 

In a statement, Charline Whyte, senior campaign representative for Sierra Club Georgia’s Beyond Coal campaign, said, “the coal ash at Bowen can be reused regardless of whether or not the power plant itself retires, and it would be a huge mistake to view the plant as a coal ash factory when the power it produces is costing customers millions in excess costs and still pollutes air and water.”

Whyte added, “Georgia Power has millions of tons of coal ash to deal with, and it’s unlikely that the utility can use all of it in beneficial reuse projects.”

Georgia Power still plans to leave the Plant Bowen coal ash that is not reused on the site, though it will remove it from its unlined repository and place it in a new lined pit. Keeping the ash on-site worries advocates since the region is prone to sinkholes due to the porous karst geology. 

In 2002, a sinkhole opened beneath Plant Bowen’s pond, releasing 2.5 million gallons of coal ash into groundwater and the nearby Euharlee Creek. The nearby city of Rome was forced to temporarily divert its water intake to another river. 

“The very notion that we would consider approving, in a modern age, the permanent storage enclosure of this dangerous material in wetlands, right next to rivers, and frequently submerged in groundwater, is a little mind-blowing,” said Jesse Demonbreun-Chapman, executive director and riverkeeper of the Coosa River Basin Initiative in Rome, Georgia. 

An environmental gamble

Coal ash contamination of groundwater has long been a concern in Georgia. In Juliette, near the state’s largest coal-fired power plant, 45 residents have signed on to a class action lawsuit demanding compensation for various illnesses, including cancers and cardiovascular disorders that they believe resulted from contaminated water. The lawsuit claims that Georgia Power illegally discharged coal ash that contaminated the groundwater, which much of the population taps through private wells. 

People who rely on private wells are particularly vulnerable to contamination, since there is no systematic water testing or treatment as there is for municipal water systems.

“Ultimately, they’re playing Russian roulette with people’s lives,” said Melissa Keefe, a resident of Rome, Georgia, and a former employee at the elementary school 2 miles from Plant Bowen. 

Prior to providing a closure permit to Georgia Power for its plans to cap Plant Bowen’s ash pond in place, Georgia environmental regulators opened a 60-day public comment period in September 2021. In a written response to hundreds of messages, including complaints that the coal ash in Plant Bowen’s ash pond could cause kidney damage and various other life-threatening illnesses, Georgia regulators replied that coal ash is not classified as a hazardous waste, and that Georgia Power’s closure plans meet regulatory requirements.

In heated debates leading up to the 2015 federal coal ash rule, environmentalists argued that coal ash should be classified as a hazardous waste demanding stricter disposal protections. But industrial users of recycled coal ash argued that such a designation would harm their ability to use coal ash in building materials, and ultimately the federal government decided not to label it as hazardous. 

Kevin Jeselnik, general counsel for the Chattahoochee Riverkeeper Association, an Atlanta-based group focusing on the health and safety of the Chattahoochee River and its tributaries, said the power company’s plans to leave the ash at some sites in place are not legal or safe. “Federal law states pretty clearly that if coal ash is going to be stored in unlined impoundments, it must be absent any free liquid,” Jeselnik said. 

Georgia Power is closing in place three ash pits at Plant McDonough-Atkinson, which sits on the Chattahoochee River just north of the Atlanta city limits and within the metropolitan area. Disclosures made by Georgia Power in the closure permitting process revealed that coal ash pits interact with local groundwater. “It’s not like they’re kind of close,” Jeselnik said. “It’s evident from the utility’s own disclosures that groundwater is in the coal ash pits.”

In response to a request for comment about the January 2022 EPA notice of intent to enforce coal ash storage rules, and the plans to cap some sites in place, Georgia Power spokesperson John Kraft said, “review of EPA’s announcement is ongoing,” and that the company will work with the state’s Environmental Protection Division to remain in compliance.

“The Company’s environmental compliance plans are based on long-standing rule interpretations held by both industry and environmental regulators and employ industry- and agency-accepted engineering practices utilized for closure designs that are consistent with the solid waste regulatory requirements on which the CCR [coal combustion residuals] rule is based,” said Kraft, by email. 

The future of Georgia coal ash 

In 2019, Georgia Power officials convinced the Georgia Public Service Commission that the state regulatory body had no say over the method and long-term safety of coal ash cleanup. Only the size and distribution of the cost recovery was within the commission’s rightful scope, the company successfully argued. Environmental concerns, according to testimony by Mark Berry, Georgia Power’s chief of environmental compliance, were up to other agencies to adjudicate.

On July 14, the state Supreme Court denied a petition from the Sierra Club to review the costs of coal ash cleanup passed on to ratepayers in the 2019 rate case. 

Georgia Power is compelled by state law to explain to the Public Service Commission every three years where it plans to source its energy from and how it plans to charge its customers. In a rate case filed in July, Georgia Power asked for a second round of cleanup payments to be billed to its customers. The Public Service Commission ultimately did not approve that request. 

“Commissioners should be concerned that ratepayers are being forced to pay for coal ash clean-up that will not get the job done and could mean billions of dollars of cost overruns when groundwater contamination continues,” said Jennette Gayer, director of the advocacy and conservation group Environment Georgia, in an emailed statement before the commission made its decision.

Dori Jaffe, a managing attorney for the Sierra Club, noted that the fate of Georgia’s coal ash ponds, and consequently the prices that consumers will pay in the future, will be determined in part by how the EPA handles several canary-in-the-coal-mine cases in other states.

Plant Gavin, owned by Lightstone Generation in Cheshire, Ohio, is currently one of a dozen coal ash sites whose closure plans the EPA is reviewing. The plant is the seventh largest emitter of carbon dioxide in the United States, and its former owner, AEP Ohio, decided to purchase the entire nearby town of Cheshire in 2002, in order to avoid expensive litigation over violations of the Clean Air Act.

“My best guess would be that we have to wait until a final decision comes out of EPA” on Plant Gavin, Jaffe said. “And at that point, that’s probably when we will start to see some movement” from Georgia Power or state regulators on sites within Georgia, as Georgia regulators may look to precedent in other states to inform their decisions.

In an April 22 filing with the Public Service Commission, Georgia Power offered to excavate over 14 million cubic yards of coal ash at Plant Wansley, its third largest impoundment. 

“I suspect they are getting nervous about leaving coal ash sitting in groundwater,” Jaffe said in an email, “and are maybe recognizing that their current plans to cap-in-place won’t get approval anymore.”

Kraft said the decision to switch to removal was made “to maximize the use of the existing landfill asset and provide for future beneficial use of the ash as driven by the market.”

The Chattahoochee Riverkeeper Association maintains that coal ash should be excavated and moved into landfills further from rivers, but not necessarily off the premises of the power plants. Jeselnik, the organization’s general counsel, hopes that the excavation at Plant Wansley might serve as a model for the other unlined ash ponds along the Chattahoochee River, including Plant Yates and Plant McDonough-Atkinson. 

A heavy burden

Georgia isn’t the only place where coal ash cleanup costs have ballooned, and ratepayers have paid. In North Carolina, a legal settlement is forcing Duke Energy to excavate ash at all its plants. When Duke was planning to close some of its ash ponds in place, it said the cost would not exceed $5.6 billion. Now that it needs to excavate all the ash, the company says that the cost could rise to $9 billion. In another settlement earlier this year, Duke agreed to lower the figure it would seek to charge customers for its coal ash cleanup in North Carolina.

Some environmental advocates and lawyers have argued that utilities inflate their predicted cleanup costs, perhaps to convince regulators to allow them to leave ash in place or do less thorough cleanups.

Frank Holleman, a senior attorney at the Southern Environmental Law Center, told Utility Dive in 2019 that “utilities, when they’re fighting against having to clean up sites, greatly overstate the cost of excavating.” Duke Energy in particular, Holleman said, “has routinely exaggerated estimates of cost.”

Costs are especially hard to predict in Georgia because the Public Service Commission has granted Georgia Power’s requests to keep site-by-site estimates and line-item costs hidden, arguing it is a “trade secret.” Filings going back to 2015 on Georgia Power construction projects indicate that the commissioners ignored their own agency staff, who advised against allowing Georgia Power to hide cost calculations from the public. 

Kraft said that the company does not disclose projected costs on a specific basis in order to protect its customers’ interests. “Release of projected budgetary estimates could impact contract terms and inflate bid pricing, harming the company’s ability to provide the most cost-effective solution,” Kraft said.

Both Demonbreun-Chapman and Jeselnik, of the Coosa River Basin Initiative and the Chattahoochee Riverkeeper Association respectively, told Energy News Network that their organizations have not felt Georgia Power is transparent or working with ratepayers’ best interests in mind. 

“When you’ve got a corporation that’s there to maximize profits for shareholders, the calculus is compliance, not the common sense of what to do with this waste stream,” Demonbreun-Chapman said. “We’ve tried to have conversations in good faith, but our difference of opinion is pretty vast.”

So far, Georgia Power has charged its customers for cleanup costs through monthly bills that include a line item for “Environmental Compliance Cost Recovery.” Since April 2020, that charge has been equivalent to just over 18% of customers’ bills, according to a public filing with the commission. Commission spokesperson Tom Krause indicated in an email statement that approximately one-sixth of the environmental compliance charge was for coal ash cleanup, but did not respond to a request for a more specific figure.

In addition to the charge for coal ash cleanup, ratepayers also are being billed for the construction of a new 28-megawatt nuclear power plant in eastern Georgia. Georgia Power has recently indicated that the total cost of construction will approach $30 billion, twice the original sum approved by the Public Service Commission. This translates to an additional 11% tacked on to customers’ bills.

In its integrated resource plan approved in July, Georgia Power indicated that changes to its energy grid, including an additional emphasis on solar power generation and storage, will raise the typical monthly electricity bill by $14. The commission is scheduled to vote on all rate-related matters at the conclusion of this year’s rate case in December, and the resulting rates will be in force for the next three years. 

Georgia’s utility bills were the fifth highest in the United States as of 2019, when the rate case regarding coal ash costs was being debated. As of February 2022, Georgia had the eighth most expensive electricity in the nation, and was fourth for overall energy costs when factoring in natural gas and home heating oil. Alabama and Mississippi are also in the top 10 for energy costs, and customers in those states get their power from utilities owned by the parent company of Georgia Power — a conglomerate called Southern Company. 

Households in these states also have the highest average energy burdens in the country, meaning they spend the greatest proportion of their incomes on electricity. 

Given this context, advocates and ratepayers stew over what many see as the twin injustices posed by unsafe cleanup and cost recovery. 

“I think it’s on them to clean it up,” said Keefe, the former teacher. “And meanwhile the cost keeps going up.”