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NORTH CAROLINA ENVIRONMENTAL MANAGEMENT COMMISSION

Minutes of March 8, 2018 Meeting

The North Carolina Environmental Management Commission met on Thursday, March 8, 2018 in the main floor hearing room in the Archdale Building, Raleigh, NC.

Meeting Called to Order: J. D. Solomon, Chairman

The meeting was called to order at 9:00 a.m. with Chairman Solomon presiding. He provided the notice required by N.C.G.S. §138A-15(e).

Present: 11- J. D. Solomon, Chairman, David Anderson, Gerard Carroll, Charlie Carter, Marion Deerhake, Mitch Gillespie, Steve Keen, Dr. Suzanne Lazorick, Dr. Stan Meiburg, Bill Puette, Dr. Bob Rubin

Vice-Chair Wilsey and Commissioner Elam were not able to attend.

Others Present: Commission Counsel Phillip Reynolds and Counsel Mary Lucasse.

Chairman Solomon stated that he had reviewed the items with Counsel and the Vice- Chair and had an opinion from the attorney related to the last item on the agenda, Cary-Apex 2015 IBT Certificate Modification. He stated that his company, CH2M was acquired by Jacobson Engineering in late December of 2017. He indicated that personally he was not working on any matters with Duke Energy on the coal ash ponds or any other matters with Duke Energy. He assured that he did due diligence to make sure Jacobson Engineering, as a large publicly traded company, was not working on anything directly related with the coal ash matter either. He wanted to make sure that there was not a perceived conflict of interest, so for the record, he wanted to make sure this was covered and so stated. Chairman Solomon indicated that since Vice-Chair Wilsey was not in attendance, he would turn the meeting over to Commissioner Rubin who is the Committee Chair for the last agenda item.

Counsel Phillip Reynolds stated as they had discussed that because he was the presiding officer, the review goes to Counsel and the Vice-Chair. Neither Counsel or the Vice-Chair found that there were any conflicts of interest in accordance with 163A-216 as those terms are defined that would preclude Chairman Solomon’s participation. He understood that the Chairman intends to recuse himself from the final item which relates to the reissuance of the certificate for the interbasin transfer.

I. Preliminary Matters

Chairman Solomon indicated that Commissioner Whisnant was reluctant to resign but did so at his employer’s request. The Chairman considered it a loss for the Commission but Commissioner Whisnant wanted everyone to know he would help support the Commission in any way that he could.

The Chairman stated that Commissioner Smith had passed away due to his illness. Flowers were sent on behalf of the EMC to the funeral being held in the afternoon. Commissioner Smith was a good man and the Commission will miss him.

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Chairman Solomon presided as Chair of the Water Allocation Committee the prior day, but he will let Vice-Chair Wilsey chair the Water Allocation Committee in May, if no one has been appointed by that time. II. Approval of Minutes

Chairman Solomon asked for approval of the minutes from the January 11, 2018 meeting. Commissioner Meiburg made a motion to approve the minutes as written and Commissioner Carroll seconded. There was no discussion and the motion passed unanimously. The Chairman also asked for approval of the minutes from the Steering Committee on January 10, 2018. Commissioner Puette made a motion to approve the minutes and Dr. Rubin seconded. There was no discussion and the motion passed unanimously.

Chairman Solomon announced two initiatives which he had discussed with the Department, and they were very supportive of the ideas. He credited Commissioner Deerhake for suggesting assigning each Commission member to a river basin. With all the water quality issues that exist, letting each Commission member adopt a river basin would be a way for Commissioners to be well versed in the particular issues of that basin and work with Department staff as items came up to the EMC for attention, including basin planning. Chairman Solomon stated he would asked Peter Robb from American Rivers if he has the time to also come and talk about the national effort with rivers and water quality, and some of his perspectives. He thinks that will be very beneficial and beyond that he hopes that Commissioners are not burdened with any work in this area other than know your river and when they have issues for the EMC’s consideration.

The second initiative Chairman Solomon is equally excited about is regarding what was heard yesterday about the groundwater capacity zones and the interbasin transfer. A Commissioner approached him about the costs of regionalization as far as how they look at smaller water districts on groundwater and surface water costs. Commissioner Rubin has talked about emerging contaminants, nitrogen, nutrients and similar matters. Chairman Solomon stated that a he will put in place a three-person working group of Commissioners: Commissioner Meiburg; Commissioner Gillespie; and Commissioner Keen. They will work with Commissioners from the State Water Infrastructure Authority. Director Colson from the Division of Water Infrastructure has presented the State Water Infrastructure master plan and they know there’s about a billion dollars’ worth of needs in just wastewater treatment investments alone in the state. The General Assembly has done a good job of providing extra funding for programs in recent years, but it’s not enough. He stated as the EMC meets as an environmental group and see things that need to be done to protect the environment, the actions come at a price sometimes and that has to be balanced, as he has heard Commissioner Keen say so many times. Chairman Solomon would like for the work group to develop a brief white paper of the top four or five issues related to what he will call the Environmental Infrastructure Nexus. Commissioner Meiburg calls it the triple bottom line, the social, the financial and the environmental impacts. As the Commission looks forward they need to ensure they capture all ideas they have on paper, to move forward to describe what we see jointly between Water Infrastructure and the EMC. He hopes that they can start meeting soon with conference calls. He would love to see a five to eight-page white paper done by the end of the year. He asked for them to capture the knowledge that both groups have in a timely way.

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III. Action Items

Agenda Item 18-15: Request to Proceed to Public Comment and Hearing on Readoption and Proposed Amendments to Water Supply Watershed Protection Rules 15A NCAC 02B .0620 through .0624 and Regulatory Impact Analysis

Julie Ventaloro discussed the changes made to the proposed Water Supply Watershed Rules 15A NCAC 2B .0622 and .0624 since the January WQC meeting. These changes were in response to feedback from the WQC and pertained to the 10-foot vegetated setback on agricultural activities in watershed critical areas. The Regulatory Impact Analysis for these proposed rule changes was also briefly discussed. Ms. Ventaloro noted that based on feedback from the WQC, staff will specifically request comment on the 10-foot vegetated setback as well as on the cumulative impact of all the proposed changes to the Water Supply Watershed rules. Chairman Solomon asked if there was anything more stringent in the proposed rules. Ms. Ventaloro responded no. Commissioner Meiburg asked for the reason for changing the requirement for variance reporting by local programs from “annually” to “upon request”.

Ms. Ventaloro explained that requesting information on minor variances can be done more regularly using the email list staff keeps. Chairman Solomon asked if staff are getting out to the local programs regularly. Ms. Ventaloro stated that with staff losses, getting out to the local programs has been difficult in the last few years. Inspections have been more complaint driven, but staff hopes to get back to a more systematic approach soon. Chairman Solomon offered the Commission’s support with compliance. Ms. Ventaloro stated that staff had tried to align local program inspections with the 5-year basin planning schedule, and that may be a good opportunity to collaborate with the Commission member assigned to each river basin.

Commissioner Rubin made a motion to approve the proposed rules and regulatory impact analysis to go to public notice and hearing. The motion was seconded by Commissioner Deerhake. There was no discussion and the motion passed unanimously.

Agenda Item 18-16: Request to Proceed to Public Notice and Hearings with Proposed Rule Re-adoptions, Triennial Review Amendments and Draft Fiscal Note for 15A NCAC 02B .0100, .0200 and .0300

Jeff Manning presented the request that the EMC approve the rule drafts to proceed to Public Notice and Hearings. The draft fiscal note would be included when the rules went to public notice. Mr. Manning briefly went over the history for the rule re-adoptions and triennial review, highlighting proposed changes since this item was brought to the Water Quality Committee (WQC) at the January 2018 meeting, at which time they agreed to move the rules forward to the March EMC meeting. The rule encompasses state requirements as well as federal requirements for the Clean Water Act. A lot of agencies use these rules, so it is important to get them updated. Per the WQC’s direction in January 2018, more generic terms were added to 02B .0101(9), but did not change how the rule is interpreted. A change was made in 02B .0202 to the watershed definition to make it more general. All the proposed changes directed by the WQC approval are found on slide 5 of the presentation for this item.

The fiscal note was still in draft form waiting for Office of State Budget and Management (OSBM) approval. Chairman Solomon indicated concern that there is not a final draft fiscal note ready for the EMC to review and approve for public notice. Mr. Manning stated that the final draft fiscal note would be ready to include in the publication for the public hearings. Jennifer Everett, DEQ Rules Coordinator, stated that they

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normally either have a finalized note from OSBM, or they have a draft version that is submitted to OSBM. Because of the timing of the meetings, there will be approval of the fiscal note by the OSBM by the time the public hearing notice is published. After some deliberation on this issue, the EMC agreed to move forward since no true substantial changes had been made to the rules themselves. However, there remains concern on not having a final draft of the fiscal note for the Commission’s consideration.

Commissioner Carroll made the motion to approve the request, in addition to having the fiscal note approved before the division moves to the public hearing comment period. Commissioner Gillespie seconded the motion. The motion passed unanimously. Chairman Solomon stated that he does not like being pushed against tight deadlines and would have liked more time, however, he does not want to delay anything to affect the public negatively.

Agenda Item 18-17: Request Approval to Proceed to Public Notice and Hearing with Proposed Rule Re-adoptions and Amendments to Water Quality Permitting Rules and Associated Regulatory Impact Analyses

Karen Higgins, Division of Water Resources, Water Quality Permitting Section, listed the rules in this package, which include: Effluent Limitations (02B .0400), Surface Water Monitoring: Reporting (02B .0500), Point Source Discharges to Surface Waters (02H .0100), Coastal Waste Treatment Disposal (02H .0400), Special Orders (02H .1200), Local Pretreatment Programs (02H .0900), Water Quality Certification (02H .0500), Discharges to Isolated Wetlands and Waters (02H .1300), Goose Creek Water Quality Management Plan (02B .0601 to .0604), Randleman Lake Water Supply Plan (02B .0720 to .0722), and Riparian Buffer Protection Rules (02B .0605 to .0608, .0610 to .0614, .0714 to .0715, .0724, and .0734-.0735). Ms. Higgins also provided a brief overview of the history of the rulemaking process, proposed schedule moving forward, and a list of changes made after the WQC meeting. Ms. Higgins explained one change to the Randleman and Goose Creek buffer rules that was mistakenly not included in this package and requested the EMC include this change if they approved the package to proceed to notice and hearing.

Chairman Solomon asked how the proposed buffer rules addressed viewscapes and his interest in providing an update to the Environmental Review Commission (ERC). Ms. Higgins indicate she would draft a memo for the Chairman’s consideration once the EMC approved the rules to go to public notice.

Commissioner Rubin made a motion to approve to proceed to public notice and hearing with the proposed rule re-adoptions and amendments to the Water Quality Permitting Rules and Associated Regulatory Impact Analyses, including the change to the Randleman and Goose Creek buffer rule indicated by staff. Commissioner Keen seconded the motion. The motion passed unanimously.

Agenda Item 18- 18: Request Approval to Proceed to Public Notice and Hearing with Proposed Amendments to 15A NCAC 02K .0212 of the Dam Safety Rules and Fiscal Impact Analysis

Mr. DeVane explained that the DEMLR staff had gone through the standard review process with the Dam Safety rules in late 2016 and 2017 and had concluded that, with the exception of two, clearly-obsolete, rules, that all rules were necessary and, since there had been no objections voiced, that the rules should be classified as “necessary without substantive public interest.” He related that the staff was surprised when the Rules Review Commission (RRC) concluded that a comment received from a citizen

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about an out-of-date statutory reference should be considered an “objection” and that the rule should now be classified as “necessary with substantive public interest.” He then explained that the decision by the RRC would require the EMC to revise rule NCAC 02K .0212 to make the changes in statutory reference and to take that proposed rule change through the public involvement process. He explained that he did not expect any opposition to these proposed changes but to assure an expedited process, the staff recommended a public hearing be held here in Raleigh during the month of May. He commented on the wording changes, and noted that the Fiscal Impact Analysis had been approved as having “no substantial economic impact.”

Commissioner Rubin made a motion that the staff be given permission to proceed to public notice and hearing with the proposed amendments to 15A NCAC .0212 of the Dam Safety Rules and the associated Fiscal Impact Analysis. Dr. Lazorick seconded the motion and the motion passed unanimously.

Agenda Item 18-19: Request Approval to Proceed to Public Comment with the Initial Determinations for the Water Resources Program Rules (15A NCAC 02G)

Linwood Peele presented to request approval to proceed to public comment for the initial determinations for the Water Resources Program rules, 15A NCAC 02G .0100, .0300, .0400, .0500 and .0600. Mr. Peele stated that they are in the first step of a three-step process. The .0100 and .0300, .0500 and .0600 rules are within the Division of Water Recourse (DWR), and .0400 is within the authority of the Division of Emergency Management in the Department of Public Safety, who will be conducting review of those rules. Of these 27 rules, 20 are necessary and do not have substantive changes and do not have substantive public interest which include sections .0100, .0500 and .0600. Some of the changes update references to the old Department name of DENR to DEQ. There are 7 rules that are unnecessary, which are sections .0300 and .0400. Unnecessary means that the rules are now obsolete or redundant. Currently there are no known concerns from the public.

Chairman Solomon indicated they are all familiar with this process. There were no questions. Commissioner Carroll motioned to approve to move to public comment. Commissioner Carter seconded the motion. The motion passed unanimously.

Agenda Item 18-20: Request Approval of 2018 EMC 303(d) Listing and Delisting Methodology

Pamela Behm and Cam McNutt, with the DWR Modeling and Assessment Branch, gave a brief overview on the statutory authority for the EMC role in the 303(d) process, the history of the 303(d) assessment methodology, EPA’s decision on the 2016 303(d) list, the status of metals assessment, and proposed clarifications to the 2018 303(d) Listing and Delisting Methodology to address small datasets and to resolve concerns with removing waters from the 303(d) list where there is low statistical confidence that waters are meeting criteria. EPA Region IV has reviewed the proposed changes and has indicated that the changes address concerns. The timeline for the 2018 303(d) list includes receiving public comment on the methodology changes concurrent with public comment on the draft 2018 303(d) list.

Chairman Solomon mentioned a few specific concerns received from stakeholders. First, was a concern regarding the April 1, 2018 deadline for submittal of the 303(d) listing to EPA for approval. Chairman Solomon noted that the timeline presented would get the list to EPA before the end of the calendar year. Ms. Behm indicated the state had just received the kick-off letter from EPA in the last week

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and the letter specifically notes that NC is in the process of updating the methodology to address concerns and that EPA is aware that NC will miss the April 1 deadline. The second concern received was regarding augmenting data and the use of older data. Staff are applying a process to a provision that was already in the methodology that will allow for augmenting small datasets when current data indicates that there is an impairment. The third issue was related to concerns about the chlorophyll-a water quality standard that are beyond the scope of assessment and are best dealt with through the nutrient criteria development process. Staff have not proposed anything new in the methodology to change how the chlorophyll-a standard is assessed. Fourth was regarding how assessment units are established. Staff are not proposing to change the process for establishing assessment units.

Commissioners discussed the public comment process. Ms. Behm noted that there was no public comment on the 2016 303(d) Assessment Methodology. Commissioner Carroll noted that the public is interested in allowing for continued conversations about the proposed changes. Commissioner Gillespie asked if there could be adjustments before the list is finalized after public comment if there is an egregious error. Staff confirmed that changes could be made.

Commissioner Meiburg remarked that he reviewed the changes with three criteria: the process encourages more monitoring, the process does not create bias that it is too easy to get off the list versus get on, and that sampling needs to be representative, not put waters on the list due to a couple of outliers, but capture true impairments. He noted that having delisting described is in the public interest and values moving forward, as this has been a subject of dispute with EPA for many years and it seems as if these changes can finally resolve some of the disagreement. The timeline proposed gets NC back on schedule to do these assessments in a timely manner.

Commissioner Deerhake noted that although this process does not trigger the 30-day rule, it is an important issue and suggested that the commission may need to reconsider their rules for this type of situation in the future. Commissioner Puette suggested bringing the item to the July Water Quality Committee as an information item to report on progress. Commissioner Keen requested that when staff report on progress during the July 2018 Water Quality Committee, staff also report on comments that have been submitted by the public in the interim.

Commissioner Rubin made a motion to approve the assessment methodology and require an interim information presentation at the July 2018 Water Quality Committee. Commissioner Puette seconded the motion. The motion passed unanimously.

Agenda Item 18- 21: Request to Proceed to Public Notice with the Proposed Reclassification of Enka Lake in Buncombe County (French Broad River Basin) to Class B

Ms. Kountis stated the Biltmore Lake Association had submitted a request for Enka Lake to be reclassified from Class C to Class B to protect the existing waters’ primary recreation uses. She stated the 62-acre lake was built in 1933, is recharged by Bill Moore Creek and small tributaries, and was used to provide cooling water and if needed water for fires for a manufacturing facility until 2001, when the lake and surrounding land were sold to the Biltmore Farms Company, which developed the lake’s residential community. Ms. Kountis said the request indicated the lake is used for organized full body-contact activities so the Class B is the most appropriate classification, and there is a swimming area in the lake used by the community.

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Ms. Kountis stated that land adjacent to the lake is mainly residentially developed accompanied by forested land and a school, and the lake flows into Hominy Creek. She said the rest of the lake’s watershed is mainly forested lands and rural development along with limited forestry, agricultural lands, and government managed areas. She stated the most of the lake’s watershed is covered by the Phase 2 rules, the entire lake’s watershed is within Buncombe County, and water quality studies conducted last summer show the lake meets Class B standards. She said that if reclassified, new NPDES wastewater discharges to the lake that contain fecal coliform would be required to have a coliform limit, and there are no permitted or planned such discharges to the lake that would be impacted by the proposal, so the associated regulatory impact analysis shows no cost. Ms. Kountis asked for EMC’s approval to go out to public notice and estimated an effective date of January 1, 2019 for the proposal.

Dr. Lazorick asked if testing was required, and Ms. Kountis said 5 samples were taken in 30 days to see if the water met fecal coliform standards. Dr. Lazorick stated she was surprised there would not be a small regulatory impact if a new requirement needed to be met. Ms. Kountis said an impact would have been felt had there been NPDES discharges affected. Dr. Lazorick stated it seems strange to build houses around a lake without it being called recreational to being with, it was sold in 2001, and why did it take until 2018 to call it recreational. Ms. Kountis said in some cases, communities are not using a lake that might have been built for recreational uses; it’s just a visual amenity. Ms. Kountis stated in this case the homeowners group, which is knowledgeable of DWR regulatory processes, is active, and has been monitoring for fecal coliform and other parameters for some time.

Dr. Rubin made the motion to approve the proposed reclassification of Enka Lake in Buncombe County as a Class B recreational water to move forward to public notice. Dr. Meiburg seconded the motion, and the motion passed unanimously.

Agenda Item 18- 22: Request to Proceed to Public Comment Regarding the Periodic Review of Existing Rules Report for 15A NCAC 02I and 02J. NCAC 02A

DEQ General Counsel Bill Lane presented the initial determinations to go to public comment for the periodic review of existing rules 15A NCAC 02I and 02J. These are Departmental rules because they consist of subject areas that span across the regulatory divisions. In Subchapter 02I, the rules deal with public hearings for rulemaking and permitting as well as petitions for rulemaking and petitions for declaratory rulings. The last two topics are on the agenda for later the meeting. Many of these rules are several decades old and are somewhat outdated and need to be updated. This readoption process allows this to occur. DEQ proposed initial determinations for the Commission’s review to take them out to public comment. The other subchapter is 02J on the topic of civil penalties. These are rules that DEQ still needs but have been around a long time and need to be updated to stay current with the law in the way that DEQ currently assess and collect civil penalties. For Subchapter 02I, there are a total of 17 rules. DEQ designated 11 of them to be considered necessary with substantive public interest which would move forward to readoption. There are 6 rules identified as necessary without substantive public interest and would not need to go through the readoption process if they stay in this category. Similarly, for Subchapter 02J, of the 10 rules, 9 were designated as necessary with substantive public interest primarily because of their age and the restructuring of the Department over the years. One rule is needed but does not need to be amended.

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Mr. Lane presented the schedule for these rules, which were considered at the January Steering Committee. DEQ staff has requested approval to take these determinations out for public comment to meet this requirement by the end of this year, and then initiate the readoption process in 2019.

Chairman Solomon commented that in 02I .0501, the classification is fine but if it were classified now as unnecessary it would go away and there would be a gap. He urged the EMC to keep everything together as these are presented today until they are put forward for readoption. For this rule though, when former Chair Hutson had a petition for rulemaking, he had a different rule to assess it by because the items in Paragraph (c) were a requirement in Paragraph (a) but now it’s optional because this rule was amended in 2016 to change the language from ‘shall’ to ‘may’ based on comments from the RRC. This established a lower bar for completeness now. It’s timely, and doesn’t affect what we are doing now but it’s fresh in your mind the way current Committee Commissioners would have to do proceed versus two years ago. The bigger issue that Chairman Solomon noted was in rule .0502 and .0503 as the process that Commission faces which are different from how other Commissions address petitions. In .0502 it says the Chairman “shall” refer the completeness to the appropriate chairman of the Committee, and the Committee Chair takes over to decide who speaks in favor of the petition and who speaks in potential opposition. There is not an option for the Chair of the Commission to decide whether to refer it to the Committee. The clock starts the 120 days requirement in the APA, but this special EMC rule we have the ‘shall’ and the Committee has to review it. The Chair indicated there may be some nebulous language in the APA in that it looks a little different here because the Commission developed its own rule.

Counsel Reynolds stated that the APA statute allows Commissions to establish the procedures and processes for considerations for petitions for rulemaking. The fact that .0501 was adopted by the EMC, and recently approved by the Rules Review Commission, raises a presumption of the validity of the rule is when the 120-day clock starts.

Chairman Solomon was concerned by the ‘shall’ in rule .0502 as a procedural issue because it states it has to go to the Committee, but in .0503 it says that the only thing that has to happen is when it comes back to the Chairman of the EMC that the Chair does not have to hear from anyone else on the petition. The Chair could decide to hear from everyone else for both support or in opposition of the petition. He thinks in the future for .0502 there needs to be a ‘may’ in place of the ‘shall’ regarding sending it to the Committee. This would allow the Chair to decide whether there will be two meetings or one on a petition for rulemaking. Looking at the rule on petitions for declaratory rulings, there is not a Committee review, and rather the item goes straight to the full EMC. On the agenda today, the WASCO item had to go to the special Committee meeting in February to come to the March EMC meeting within the 120 days because of the .0502 rule. The declaratory ruling for today only had to happen today because it didn’t have to go to Committee, and it could be brought to the full Commission. The Chair would like to see .0502 and .0503 more aligned with the spirit of the 120 days.

Commissioner Gillespie stated he was not agreeing or disagreeing but wanted to raise the question if in the readoption process whether the EMC can make any substantial changes.

Chairman Solomon stated that it was a good point. In some cases, we have taken the opportunity to make changes beyond HB74 but we have tried hard to stay close to the charge of HB74. He said that the buckets that these rules have been placed in now is okay but when they come back we need to think about what we want to do as a Commission or at the Executive Committee for future years ahead.

Mr. Lane added that the buckets that we have identified and proposed to the EMC reserves the opportunity to come back to the EMC a year from now and make changes in these rules that are outdated.

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The Commission could do that separately outside of the periodic review process or it can do it in a way that is integrated into the readoption.

Commissioner Deerhake was glad that rule .0503 was raised as we have two petitions on our agenda today. She does not believe there is anything in the current language that prevents the Chairman inviting parties representing the petitioner and the respondent to present to the full Commission. The rules also say, “unless the Chairman rules otherwise, discussion on the petition shall be limited to the members of the Commission, counsel to the Commission and the Director”, that is discussion that is not necessarily presentation to the Commission, in her opinion. For today the Chair would have the option of inviting the petitioner and the respondent to present to us if it’s the Chair’s prerogative.

Chairman Solomon stated that is correct, and he chose not to. No doubt that he has the power to do that, but the issue is that the current rule takes the power away from the Chair and gives it to the Committee Chair. If five people wanted to speak against the issue coming before the EMC today on the CO2 issue, he could have chosen someone like Civitas because he gets to pick one by the rule. The Chair of the EMC could pick five to come talk or pick a different one than Civitas to come talk before us, which doesn’t seem to be in the spirit of how the EMC should run a unified approach and that we give this power with the ‘shall’ and it be very prescriptive for the Committee Chair. It could be very problematic in the future the way .0502 is currently stated. The Chairman asked if there were any other issues or comments on how the Commission sees it should approach petitions for rulemaking and declaratory rulings. There were no further comments and the Chairman asked for a motion.

Commissioner Anderson made a motion to accept DEQ’s initial determinations and move forward to public comment the determinations for the rules in 15A NCAC 02I and 02J and Commissioner Carter seconded. The motion passed unanimously.

Agenda Item 18-23: Request by WASCO LLC for Environmental Management Commission to Review Petition for Declaratory Ruling regarding the Applicability of 15A NCAC 13A .0113(a)

Counsel Phillip Reynolds opened with a background statement that WASCO had withdrawn its petition for declaratory ruling, that was filed on December 8, 2017, and had requested to proceed on a subsequently filed petition for declaratory ruling that was submitted on March 5, 2018. This subsequently filed petition has been received by the Commission and is waiting on the determination of completeness but WASCO has agreed to allow that petition, if deemed complete, to be heard in May 2018 at Chairman Solomon’s discretion. Chairman Solomon then stated that Action Item 18-23 was officially dropped from the day’s agenda and that the Commission would hear the item again in May of this year.

Agenda Item 18-24: Petition for Rulemaking to Amend 15A NCAC 13A .0102(b) for the Definition of “Operator”

Chairman Solomon introduced this action item by informing everyone that a special meeting was held in February, regarding this item to allow the Petitioner and State Counsel more time to present their positions than would have been feasible at a regularly scheduled Committee meeting. If additional discussion is needed then the Division Director would be available and that it was his intention to discuss the Action Item at hand and then vote.

Commissioner Puette asked that everyone make sure they had the correct version of the minutes from the February 7, 2018 special Ground Water Waste Management Committee (GWWMC) meeting as

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finalized the day before. Commissioner Puette gave a brief summary of the issue before them indicating that on December 5, 2017 DWM received a petition for rulemaking from attorney, Sean Sullivan, on behalf of the petitioner, WASCO. The petition addressed the definition of the term “operator” and requested an amendment be made to add the term “operator” to the list of terms whose definitions are not incorporated by reference.

On February 7th, a special meeting was held at which time the GWWMC heard and considered the petition. After hearing from both sides, with Sean Sullivan representing WASCO and Hill Davis acting as counsel for the State, the recommendation from the GWWMC to the EMC was to deny the petition for the several reasons. The first is that the regulations were deemed necessary with public interest in 2017, and no comments were received regarding these rules during the readoption process. WASCO’s attempt to escape liability for responsibility of the site has been the subject of three decisions by the Office of Administrative Hearings, by the Superior Court, as well as the Court of Appeals. All three found WASCO an operator according to the definition of “operator” based on state and federal definitions. In addition, the NC Supreme Court denied the request for discretionary review.

Another reason for the denial was that if they were to initiate rulemaking, as requested by the petitioner, it could call into question EPA’s delegation of the RCRA program to NC in that the state program must be at least as stringent as the EPA’s.

Finally, when the petitioner was asked, at the hearing, as to whether WASCO would be an operator, should the definition be limited as requested by the petitioner, there was no answer as to whether that would resolve WASCO’s problem.

Chairman Solomon then accepted Chairman Puette’s presentation as a motion, which was followed by a second from Commissioner Keen. With no further questions Chairman Solomon asked for a vote on whether to deny the petition to request the initiation of rulemaking. The vote was unanimous to deny the petition.

Agenda Item 18-25: Petition for Rulemaking to Limit North Carolina’s Carbon Dioxide Emissions to Protect a Stable Climate System and Preserve the Natural Resources of North Carolina

Commissioner Meiburg presented the request for the EMC to consider the petition for rulemaking pursuant to 15A NCAC 02I .0503 and to consider the AQC’s recommendations for appropriate action. On November 14, 2017, the Division of Air Quality (DAQ) received a petition for rulemaking from the Duke Environmental Law & Policy Clinic, on behalf of three youth petitioners. The petition addresses carbon dioxide emissions in North Carolina and requests that the EMC initiate rulemaking by July 1, 2018 to eliminate statewide carbon dioxide emissions by 2050. The AQC held a special session on February 7, 2018 for interested parties to speak their position.

The AQC unanimously denied the petition due to concerns about the petition’s scope, timetable for the rulemaking notice, and State vs federal authority. The Committee’s decision does not indicate that North Carolina should not be concerned about the issue. This is especially true since neighboring states, such as Virginia, are joining greenhouse gas initiatives. It was also noted that the minutes for the special AQC session were well done and complete.

Chairman Solomon stated that there were discussions during and after the AQC meeting that he would like to discuss in detail after the motion and vote were taken.

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Commissioner Carter expressed concerns regarding the petition’s content, outside influence, statutory authority, timing, and completeness. He specified the impracticability of eliminating statewide carbon dioxide emissions to zero by 2050 since it would significantly and negatively impact the standard of living in North Carolina. He also noted agreement with the AQC Chairman about considering practical and realistic measures to deal with climate change; unlike what he sees in the current petition.

Chairman Solomon specified that many of the Commissioners have differing views on what the State can do about climate change. The worst thing to do is clash viewpoints; there is a lot of commonality for working together. The purpose of having a low bar for bringing the petition to the EMC, was to discuss the issue as a body of 15, instead of making a decision as a body of one.

Commissioner Deerhake noted that the petition is valuable because it speaks to the need for North Carolina to increase awareness of climate change, to initiate policymaking for mitigating preventable impacts, and for adapting to impacts that policy cannot avert. The petitioners provided a detailed accounting of climate change impacts with respect to human health, businesses, and industry that will impact North Carolina unless the State joins the world and neighboring states in reducing greenhouse gas emissions.

Commissioner Carter commended the EMC Chairman for bringing the petition for discussion at the full EMC meeting since there were grounds for the Chairman to deny it. When a Chairman denied a petition in the past, it was a procedural matter and did not allow further discussion of the real issues. Also, for clarification, he stated that the three youth petitioners are courageous for their part in the petition. Chairman Solomon noted that if a petition qualifies, it is not a waste of time to discuss the issue as a body of 15 instead of a body of one.

Commissioner Lazorick wanted to ensure that the Commission is interpreting the petition correctly. The petitioners’ definition of “in-boundary carbon dioxide emissions” includes sources directly supplying power or heat to a business located in the State. They were not including all types of emission sources. Commissioner Carter responded that the first provision of the petition specifies that statewide carbon dioxide emissions must reach zero by 2050. Commissioner Lazorick replied that the overarching sentence is for achieving “in-boundary carbon dioxide emissions” limits. Commissioner Carroll specified that the petitioners are relying on a Stanford professor’s thesis. The thesis summarizes that it is possible to achieve zero carbon usage in totality by using wind, water, and solar. Their goal is to reach zero in totality. Commissioner Lazorick noted that usage of zero is different than emissions of zero. She also wanted to clarify that the petitioners were defining which emissions they thought the Rule would apply to.

Chairman Solomon stated that there were several items of discussion during the AQC meeting regarding sources of information that the AQC may begin reviewing and collecting. He wanted to recognize Assistant Secretary Holman to speak later about a potential stakeholder group for finite topics and/or partnering with the Department of Environmental Quality.

Commissioner Meiburg mentioned that there are items being pursued that reach activities that could progressively reduce the State’s overall carbon footprint. As a legal matter, it is a complicated issue due to the Hardison Amendment and determining what issues are preempted. There are topics that the State could consider within the scope of our authority that are being pursued in other jurisdictions. The issue in the petition should not be put off for future generations to handle.

Commissioner Deerhake noted that the Clean Smokestacks Act (CSA) and Climate Action Planning Advisory Group’s reports contain recommendations for carbon dioxide. It would be nice to have an accounting of which recommendations have or have not been addressed and which are no longer valid. Chairman Solomon stated that it would be a good starting point if AQC Chairman Meiburg, AQC Vice

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Chairman Carter, and members of the AQC want to look at the reports. He would like to see some estimate of measurable damage in North Carolina from carbon dioxide emissions. Another thing to note is that the State is still affected by what happens in other states so there may need to be a regional solution. It would be nice to have the Department of Environmental Quality assist with the subject. Commissioner Meiburg specified that this topic is complicated since two questions must be asked: 1) is what we are attempting to do going to make a difference? and 2) does that mean that we are released from our obligation to do anything?

Commissioner Carroll commented that his main objection to the petition was that it was the sent to the wrong venue. He believes that it should have been sent to the legislature because they can write laws that can move the State in the direction the petitioners are trying to achieve. Also, the Governor’s Office may write executive orders within his scope of authority.

Commissioner Deerhake noted that she would like to see a request for public input or information. Chairman Solomon replied it would be a good idea to have public input in a stakeholder process to keep the topics and discussions more focused.

Assistant Secretary Holman concurred with Commissioner Deerhake about reexamining the 2005 CSA carbon dioxide report. Also, as noted before, the Climate Action Planning Advisory Group produced a report that was an outgrowth from the 2005 CSA carbon dioxide report’s recommendations. Both reports contain recommendations that: 1) have or have not been implemented; 2) may require voluntary measures; 3) may require regulatory measures; and 4) that may require statutory changes. The AQC may be the starting point for the discussions that move towards a broader stakeholder process. There is also ongoing work by the Department of Environmental Quality, as part of the U.S. Climate Alliance, in assessing greenhouse gas inventories and other initiatives that may be considered. Sushma Masemore is researching proposals and is preparing reports for the May meeting.

Chairman Solomon noted that he is leaving it up to the AQC to develop a plan and to coordinate with Mike Abraczinskas on this issue.

Commissioner Meiburg made a motion to deny the petition for rulemaking on behalf of the AQC to limit North Carolina’s carbon dioxide emissions to protect a stable climate system and preserve the natural resources of North Carolina. Commissioner Carter seconded the motion. The motion passed unanimously.

Agenda Item: 18-26 Request Approval of Hearing Officer’s Report and Issuance of Water Quality Special Order by Consent (SOC) S17-009 to address Non-engineered Seeps from Coal Ash Basins at Duke Energy’s Allen, Marshall and Rogers (Cliffside) Steam Stations

Chairman Solomon gave a few points of order to ensure that things moved along in an orderly and effective fashion, indicating Jay Zimmerman would give the Commission a summary as a framework for the presentation. There were three levels of questions he advanced in trying to manage the agenda concerning why they are doing this, and the EMC’s authority. He had heard some specific concerns with the hearing officer’s report and other issues, realizing that the assessment of penalties was also part of their purview in this SOC. After Jay spoke, Commissioner Carroll, who was the hearing officer, would speak and staff would be there to support Commissioner Carroll. The Chairman indicated that he wanted to give the EMC some aspects that he saw as a starting point for discussion of all the issues. Chairman Solomon stated that he had some concerns from a procedural standpoint that would shape whether the EMC move on this issue today or have an alternate path to get to another point.

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Commissioner Carroll indicated he served as the hearing officer for the Special Order by Consent (SOC). He commented that this is all new information to the Commissioner members. The SOC was an agreement that was entered between the Department and Duke Energy Carolinas (Duke) without any involvement by the EMC intended to address an issue with what have been called non-engineered seeps at Duke’s coal ash ponds which have become a stumbling block in terms of NPDES permitting. Commissioner Carroll indicated there needed to be a way to address these non-engineered seeps so that permitting can begin and this was the way the Department chose. Normally the Director would sign the SOC after it was negotiated. In this case it came to the EMC because the Department decided there was enough public interest for this to have a public meeting and solicit public comments at a meeting. Because there was a public meeting and only because there was a public meeting, it comes to the EMC for final action. Otherwise, this would have been signed by the Department. Commissioner Carroll asked DEQ staff to make a short presentation to the EMC to better understand the issues and the necessity of the agreement. Before the presentation, a change in the agreement was distributed by Assistant Secretary Holman prior to the EMC debating the agreement. Commissioner Carroll asked Assistant Secretary Holman to present that information and enter it in the record.

Assistant Secretary Sheila Holman stated that sending them a letter the night before the full EMC met was not the way she wanted to do business. She indicated that a lot of time and energy went into developing this SOC, including a tremendous amount of work on the part of the hearing officer, Commissioner Carroll, DEQ staff and the Duke Energy staff. Assistant Secretary Holman wanted the EMC to know over the last few days the Department had received a lot of questions about particular language addressed in the letter which was dated March 7, 2018. As they contemplated the concerns and comments that came to them late on March 7, the recommendation was made to strike the language in the penalty section regarding not being an admission of guilt and other things on the part of Duke Energy. She commented that given the decision came so late in the process, it was the Department’s recommendation only. There was not concurrence yet from Duke Energy but the agency believes that this was a necessary change, and she felt the EMC needed to contemplate how best to consider the recommendation in light of other changes the EMC may want to recommend to the terms of the SOC.

Chairman Solomon indicated the recommended change needed to be in the discussion but he wanted Counsel Reynolds to tell the members their options at the end because this was a Special Order by Consent. Duke would have to agree with anything that the EMC would do and they have a time period to consider any changes. The EMC now had the final signature authority on the document and he appreciated the Secretary and thought it was proactive, but there were options they could consider. He indicated that the Department’s recommendation would be put in the record as Commissioner Carroll wanted done.

Discussion among Commission members continued regarding the agreement signed by Duke dated 1/8 or 1/10 and the Department’s recommended change that Duke has not agreed to at that point, which Duke could sign or not sign.

Commissioner Carroll stated that the deletion is a great improvement to what otherwise is a good approach to solving a problem. If the EMC adopted this as the new language, it would be given to Duke for their consideration. If they sign it everything is great. If they don’t then it is back to the drawing board for negotiations.

Commissioner Carter asked why the Department was proposing to delete the language but had not heard why.

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Chairman Solomon stated that he had heard from a lot of people about the authorities and questions on the processes that the Commission follows, and indicated there are four SOCs coming. He wanted everyone to understand the context of what they were facing over the next three months.

Commissioner Carroll wanted to clarify whether his position was correct. His position was that the results of the deletion becomes the document that they are studying and voting on.

Counselor Reynolds stated he was happy to direct Commissioners attention to the rules. What is defined as a Special Order by Consent means a type of special order where the Commission enters into an agreement with the person responsible for water or air pollution to achieve some stipulated actions designed to reduce, eliminate or prevent air or water quality. It would seem at this point that this is not a special order by the Department on behalf of the Commission as it affects the applicant. It’s an application for a special order. The earlier agreement was to the terms that would be brought forward for public comment and consideration by the Commission, first by the public, then by the Commission. Ultimately it will be an agreement between the Commission and the applicant in this instance, Duke for the three covered facilities. Mr. Reynolds indicated he’d defer for the substantive issues and the negotiations to Assistant Secretary Holman or Mr. Lane, General Counsel for the Department about what the proceedings have been to this point. What’s in front of the commission is, in fact a recommendation to delete certain language by the Department. It is proper to act on that. If it’s a substantive modification, the applicant may choose to consider this or argue that this is no longer a Special Order by Consent. As to the substantive impact of the change in that language, he wanted time to consider the impact.

Assistant Secretary Holman stated that the Department had staff from DWR, the Attorney General’s office as well as Bill Lane and herself working with Duke Energy and their staff to craft the SOC that was ultimately signed by Mr. Draovitch on January 8 that went out to public comment. That document went to public hearing for which Commissioner Carroll was the public hearing officer. DEQ’s request is for the EMC to consider the recommended change. If the EMC accepts the change, then DEQ would need to take the next step, whether it’s asking the Department to go back and renegotiate this along with other issues that come up during the deliberations.

Chairman Solomon expressed his original plan was to recognize Commissioner Carroll after he heard from Jay Zimmerman. He wanted to hear about why DEQ is taking this action, with the purpose and the background. He wanted to hear about those aspects from Mr. Zimmerman and how it fit into the four other public hearings which are coming up, and he already named hearing officers to go out to the public to have to defend this.

Jay Zimmerman, Environmental Program Manager, presented points that Commissioner Carroll had stated. Mr. Bob Sledge gave the EMC an overview of SOC in October 2017. This SOC was being brought before the EMC specifically because there was a public hearing. There is on average about a half dozen SOCs that are entered into any given year, and a dozen SOCs that are now active within the DWR. Most of those have no known public significant interest and, therefore the delegations allow the director to sign those SOCs on behalf of the Commission. Because, in this particular case, there was a lot of community and stakeholder interest about coal ash in general, the Department decided that it was in the best interest of the people and residents around the facilities to hold the hearing and get public input upfront. The Commission must now act on the SOC as opposed to the Director signing it. This SOC includes requirements for Duke Energy to accelerate certain aspects of the Coal Ash Management Act (CAMA) including, most importantly the decanting and removal of water from the impoundments. That’s an essential step to closing these impoundments and there are a couple of other things that have to occur before they even get to that process, such as redirecting stormwater and some other things as well as the conversion to dry ash handling. There are deadlines that are specified in CAMA that Duke’s obliged to meet.

This SOC, if signed would allow Duke to accelerate that process ahead of what is stipulated in CAMA. Special Orders are a form of an enforcement action, a tool that the Department uses to implement

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certain requirements upon a responsible party. These enforcement actions are issued by the EMC under North Carolina General Statute 143.215.2 and our rules under Title 15A of the North Carolina Administrative Code, Subchapter 2H the 1200 rules. An SOC is a specific type of order that is entered into between the Department on behalf of the EMC and a responsible party. It’s a voluntary agreement, in order that the two parties may reach and achieve the same goal. In this case, the goal is to accelerate the dewatering of the impoundments. They do extend to some degree an amount of regulatory relief in exchange for binding commitments on the part of the responsible party that’s signing the document to perform the work and achieve compliance. Some elements of this SOC include up front penalties which is typical of a lot of SOCs, such as up-front penalties to existing violations, stipulated penalties for failing to meet certain metrics or deliverables. The person entering into the SOC has to commit to certain deadlines. If they don’t meet them, there are stipulated penalties that are typically daily and those penalties typically ratchet up to after a certain period of time. These conditions are normal for SOCs, along with more aggressive schedules to achieve compliance.

Mr. Zimmerman gave a brief history of this particular SOC. Ms. Holman had mentioned that it was a combination of a lot of work on the part of the Department, staff within the DWR, Duke Energy as well as various stakeholders who at various times had provided input into the whole issue of closing out these impoundments. They had been working on the issue of the discharges whether they were engineered-seeps or non-engineered-seeps, since before CAMA was established shortly after the Dan River spill which was in February 2014, and work has continued. Duke has to conduct assessments regarding impacts to nearby water supply wells and provision of alternate water and filters within a half mile of the compliance boundary that’s been established. The Department had to initially classify the impoundments based upon a level of risk, whether it be high intermediate or low. That process has been completed and currently all the impoundments are either high or intermediate. Duke Energy had to submit site assessments and corrective action plans to the Department. They have submitted an initial round of site assessment documents and corrective action plans, both of which were reviewed by the staff within the DWR, and were determined to be incomplete. Subsequently, additional assessments were conducted or are being conducted, and DWR has to date received about nine additional assessment documents that would represent what he would call a much more comprehensive assessment of impacts to groundwater and surface waters. Those are currently under review by the Department at this point.

Chairman Solomon asked Mr. Zimmerman if to start this process there would have to be an independent review, as 02H. He stated it there has to be an independent assessment done to start this process.

Mr. Zimmerman replied that was correct. Chairman Solomon asked if that assessment was done adequately to start this process. Mr. Zimmerman stated that it was and the Department did receive those documents. Mr. Zimmerman stated that the EMC had not seen the documents but he could get the documents to the EMC. There was an independent review conducted by a consultant for those facilities to make sure that the appropriate rules were met in order to begin the process of developing the Duke SOC. Chairman Solomon requested for the EMC to see those documents at some point and the Department’s review of those.

Counsel Reynolds stated that he was provided a copy of those documents recently and he had been reviewing the third-party reviews and he could provide them.

Chairman Solomon indicated that he wanted to make sure there was a date on the agreement since they took to public hearing on that version, which was done before the current recommended change was proposed. Mr. Zimmerman responded yes it was.

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Mr. Zimmerman indicated in addition to the site assessments and corrective action plans, Duke has to submit the surface impoundment closure plans by December 31 of 2019 and completion of ash beneficiation projects that the Division of Waste Management is currently reviewing. Specific to this SOC Duke had to identify all of the seeps and conduct an assessment of these various discharges including maps of where these discharges were, whether they be natural features or non-engineered vs what DWR is collectively calling engineered features. Once identified they had to implement a corrective action plan according to CAMA to address those discharges. The options they had were to either eliminate the discharge or apply for an NPDES permit to bring those discharges under regulation. There have been a lot of discussions between the agency and Duke with this particular SOC. DWR received a lot of guidance and had discussions with the EPA over the past many years just to try and get to this point. EPA guidance was considered by the agency and gave us some direction including the Hanlon memo of June of 2010 as well as a letter dated August of 2016 from the Water Director, Jim Giattina. That particular letter was in response to EPA’s review of the Marshall permit. In that particular memo, he cited challenges to permitting these non-engineered discharges because of the transient nature of these features. At times it’s just a wet spot or a little bit of water that might have some flow to it, but it’s not enough to sample. After a dry spell and they disappear. Because of some of the challenges associated with monitoring and characterizing the waste that might be in those discharges EPA thought that would represent a permitting challenge which wouldn’t lend itself very well to permitting in the NPDES permit. The suggestion was to use as an alternative, such as an enforcement tool that the agency had, which is what the SOC represents as a preferred approach to eliminate discharges.

Additional guidance also included consideration of new effluent limit guidance (ELGs.) That guidance was released in September of 2015 by the EPA. As an agency, DWR looked at all of the various documents and information that they had available to them as well as conversations they had with the EPA. Ultimately, the Department decided the best course of action was to include the non-engineered seeps into an SOC, accelerate the removal of the water, such that they will disappear and include the ones they had generically referred to as engineered, where there was a pipe or some structure of point source, into the permit as outfalls. Those would be captured in the permit and they would have limits assigned to them and monitoring assigned to it just like some of the seeps. This SOC provides a mechanism to address the non-engineered discharges or seeps. They anticipate, once the decanting begins, that they are going to see an elimination of a lot of those seeps from actually discharging the water. He referenced the Riverbend and Dan River facilities which had already been undergoing some degree of decanting. There has been a marked decrease in a number of seeps that have been discharging. They are hoping that trend continues. If they can roll this out with all the other facilities and start getting rid of the water that’s in the impoundments, then a lot of those seeps should disappear. Other aspects in the SOC include the increased monitoring frequency if certain triggers occur, quarterly status reports to the Director, comprehensive surveys to track progress and identify new discharges and a trigger that would require Duke to take a more aggressive action if upon dewatering, some of the seeps were still discharging, and that additional action would be captured in a groundwater corrective action plan. Something that would be more aggressive should the decanting and removal of water not work as anticipated. Mr. Zimmerman summarized that the goal of this SOC is to facilitate an accelerated removal of water from the impoundments to get the closure completed sooner than as otherwise required by CAMA. There are four other facilities that will be coming before the Commission in an SOC in May and four in July. Mr. Zimmerman concluded his presentation.

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Chairman Solomon questioned that two of the SOCs had been negotiated as a Department. He asked if those were Dan River and Riverbend. There is some precedence that builds into the SOC that we have here.

Mr. Zimmerman indicated that he had done a fact check on Riverbend and there was no request for public hearings. After the public notice period was satisfied, they moved to sign the SOC. Chairman Solomon indicated that what the EMC does now would set the precedence for the next SOCs that are coming to full EMC. Mr. Zimmerman stated the Department had for the reasons the Chairman had mentioned decided to go ahead and just move forward with the public hearing. The Department felt that because of the interest it was probably best to move right into the notice of the public hearing and give people an opportunity to make comments.

Chairman Solomon stated his understanding is whether they take action on this SOC or not, the full Commission needed to realize what they do today with this SOC does set precedence on what to do for the next four that are coming before the EMC. Whatever they do the EMC would take it back out to the public and have the public see what they have done with this one and use that to judge them for their future actions. It is important to get this one right.

Dr. Meiburg commented that he had some clarifying questions and part of this came from past experience in the enforcement procedures and then part from the state CAMA, there was a whole set of regulatory provisions that cover this. As he understood the agreement, it was something both the state and the responsible party have some interest in common. For the state, the interest in this agreement is to have a schedule that includes defined milestones and you have a set of stipulated penalties that are involved which are certainly an incentive for performance of the actions by the milestones. Further, the one that Mr. Zimmerman had mentioned about dewatering and decanting faster so you could minimize the seeps in the first place, that would be the state’s interest. In Duke’s case, what their interests are is that it gives them predictability as to what schedule to expect, and perhaps more importantly, it gives them avoidance of potential liability for discharges without a permit which can be the subject of citizen suits in some ways. This would shield them from citizen suits for discharge without a permit, even though as was noted in the letter of August 2016, permitting these seeps is something that’s really difficult because it’s hard to measure what’s actually being discharged, and then to write an appropriate set of permit conditions. Agreements like this are common in the enforcement world and they take different forms depending partly on whether they are administrative or judicial. In both cases sometimes they go out to comment and sometimes they don’t. In this particular case is this agreement subject to judicial oversight? If the Commission adopts, is that action itself reviewable to state court?

Counsel Reynolds stated there were certain levels of judicial review available and provided in the rules in the statutes. He referred him to 15A-02H, Section 1200 of your work rules related to Special Orders by Consent as well as the statute 150B-282.2. It does provide for judicial oversight, depending on whether it’s a special Order by Consent or it’s a Special Order implicating and implying that it’s without consent. There are different provisions related to judicial review.

Commissioner Carter stated that he had negotiated many of these and the short answer, at least as far as an SOC, you’re going to find a provision whereby the party entering into the SOC with the state waives its right to judicial review. So that for an SOC the only party that could bring a lawsuit would be a third party.

The Commissioners continued to ask questions, make comments and suggestions regarding this SOC.

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Dr. Meiburg stated the amended language is a section of the order dealing with the penalty amount and in the one before the Commission on the letter of recommendation from the Department, said that the payment of penalty was by itself was not an admission. Part of his question was, which the answer came up earlier that the issue was with respect not so much to the issues involving the Department, but potential collateral activities with respect to the Utilities Commission which has to make certain decisions about what cost are allowable can be built on rate base vs what cost has to be absorbed by the utility. He asked if that was correct.

Mr. Zimmerman stated with respect to the language that was introduced, Assistant Secretary Holman will speak more on that. To some degree a lot of that is boilerplate to advance the process so that there is no admission of guilt. The company would say “We’re not guilty and we’re not saying we’re guilty”. It’s sort of a non-statement but it’s intended to advance the process so we can move on with some work.

Dr. Meiburg stated there is an interest for the utility in entering into this SOC because this will relieve them of significant potential liability about discharging without a permit. What was going on with the recommendation to delete the language was that the concern was not so much about any potential consequences down the road with respect to the Department per se, but rather was a concern because of potential impacts of the language on activities being undertaken by the Utilities Commission. I inferred, although I’m just guessing at this point, this had to do with decisions in rate cases about what costs the utility can recover from the rate payers for some of the cleanup actions related to the coal ash ponds.

Assistant Secretary Holman commented that was correct. Those were the concerns that were raised to the Department.

Commissioner Carter asked Mr. Zimmerman if he heard him say that since there was no public comment on the Riverbend SOC that the Department has already signed it. Both parties have already signed it, Duke and the Department, is that correct? Is this language in that one?

Chairman Solomon answered no. The language was added in this SOC and not in the one for Riverbend. Commissioner Carter stated this was a deletion. Chairman Solomon indicated that the original proposal for this project had the language in it, Riverbend negotiated previously two years ago did not and discussion continued on the topic.

Commissioner Carroll stated that the EMC has two options: approving the SOC with the deletion of that language and presenting it to Duke for them to accept or reject; or to defer this action and send it back to the Department and tell them to get this language agreed to with Duke. Chairman Solomon agreed and indicated he did not want the EMC to be negotiating with Duke because the EMC had done that before. The DEQ can reach consent on behalf of the EMC with Duke.

Commissioner Carroll stated that the EMC is going to have to make a motion on it. Chairman Solomon indicated that they weren’t there yet. We need to give them a list of all the things they need to act on and he reminded the Commission that it has 90 days from the public hearing to issue a decision. The deadline affords the opportunity to have this item addressed in the May meeting or it may be an issue that it is holding up and cleaning up these waterbodies and could be subject to a special meeting.

Commissioner Carter asked if the Chairman would state what that deadline was. Counsel Reynolds said it was 90 days from the public hearing, which was approximately May 13.

Commissioner Carroll indicated that so far he had heard one issue and that is this language issue. What are the other issues that we want to get on the table?

Chairman Solomon indicated that he wanted Commissioner Carroll to tell them about the hearing officer’s report for the February 13 public hearing and about the comments that he had heard and actions taken as a part of public comment. One item focused on stipulated penalties in the SOC. Counsel

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Reynolds there is a provision that covers stipulated penalties in statutes and rules. He does know that to be common practice for SOCs even though they are not always very common that SOCs come before the Commission. He asked the Chairman if that was the question he had earlier.

Chairman Solomon stated because public comment questioned whether the penalties were enough. The public indicated they were not sufficient. Penalties are at the discretion of the Department under its delegation, but this SOC came to the EMC. The assessment of penalties does fall on the EMC purview, should they choose to allow it or they let the Department continue their path with their equation and the way they normally do it. That is a debate that the EMC has to have but clearly a common response at the public meetings was you’re letting them off easy with their fine.

Commissioner Carroll stated a lot of the comments really were not specific to the terms of the SOC. They had more to do with NPDES issues, groundwater issues and water quality issues. All the speakers were supportive of the concept of draining the coal ash ponds as quickly as possible and getting rid of these seeps. There was that universality of opinion among all the speakers. A lot were foreign comments on the same topic. This particular language issue was not mentioned by anybody. He asked Bob Sledge to make comments.

Bob Sledge, Water Quality Permitting Section stated that they did have the public hearing in Lincolnton on February 13. As Commissioner Carroll said there were nine speakers and about 31 people that attended. Most of the speakers did indicate support for the concept of the SOC and this accelerated idea of removing the wastewater. They received other comments and very few through the mail and email comments. The vast majority of those were form letters. Most said they thought this was a good idea and it was long overdue to get these SOCs started. They were looking for particular elements of closure of these systems which is beyond the scope of this SOC. They are focusing on trying to take care of one particular problem, which are these non-engineered seeps. They do believe the SOC with the decanting will go a long way towards that and also carry the process forward.

Commissioner Rubin asked if they are not permitted to deal with these seeps, if for some reason they deny the request, what are their options? How much longer does this cleanup take?

Jay Zimmerman stated that had been a challenge. You have permitted outfalls that are the classical NPDES landscape, with that are engineered designed specifically to allow the water from the treatment system to discharge. It has to meet NPDES permit limits and a lot of other criteria. Then they have these discharges that occur, some of which were designed in a way to promote stability across the dam. These are earthen structures and water moves through them. You don’t want them to become saturated. There were some toe drains that were constructed and many of these structures to facilitate the water in its ability to move out from the dam. That’s something that the Division of Energy, Mineral and Land Resources are the experts. But that process, unfortunately might result in some coal ash constituents being in the water and discharging. When he used the word engineered-seeps, it was being used not engineered in the classical sense but it’s a pipe. If you can envision a pipe sticking out of the base of a dam to relieve water pressure, it was designed specifically for that purpose and you have waste constituents in it. A lot of these structures are sitting right immediately adjacent to large bodies of water, and they are full of water themselves. It’s discharging into the subsurface and it creates these seeps that manifest themselves daylight, much like a spring does. They come and go and are subject to the effects of precipitation, prolonged droughts and a lot of them dry up, and they will pop back up. Not all have coal ash constituents in them. The mechanism that was arrived at in conjunction with input from the EPA was to try and split them into things that you could get a latitude-longitude on; you have a pipe. You put those in a permit because it lends itself best to that process. The ones that did come up could be managed with this

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alternative mechanism which is the Special Order by Consent. The whole focus is to try and eliminate the seeps entirely and we believe that will happen to a lot of them. Then the next step in the process is to deal with it through the groundwater corrective action plans. Mr. Zimmerman continued to describe and explain the seeps. The decision was made not to include them all in the permit because EPA felt that would present some challenges that they happen to agree with. The idea was to split up these two different types of discharges in a way that lends itself to an outcome that they hoped would result in a quick elimination of water and closure of the impoundments.

Commissioner Puette asked if that the SOC only pertained to non-engineered seeps? Mr. Zimmerman stated that was correct. Commissioner Puette stated that they should make that clear because the word seeps was used throughout the SOC. His question directed to Counsel Reynolds and this was if they entered into this consent agreement, if that constituted enforcement action out of the Clean Water Act which would preclude any citizen’s suits.

Counsel Reynolds stated that rather than making up something that might turn out wrong, he indicated that he was not certain because he was not well versed in the Clean Water Act at this point due to the short time with the EMC. He stated that seemed to be correct but was not sure at this point.

Chairman Solomon indicated to add this to the list of EMC questions and concerns. Commissioner Puette then stated in a minor correction, a request on pages 12 and 13 where they

refer to if they enter into this agreement, he felt that any place DENR was used that EMC should follow from that. The Chairman agreed absolutely. Commissioner Puette wanted to know how the calculations of non-engineered seeps at $4,000 were perceived. How was that calculated?

Assistant Secretary stated that there was a slight clarification on the coverage that they want Mr. Sledge to go through, non-engineering seeps and engineered seeps. This was to address Commissioner Puette’s question about if it’s just non-engineered seeps. Ms. Holman stated that there were pieces at the back of the SOC, that applied to all seeps. There is an annual report that is required.

Mr. Sledge stated that the SOC does primarily focus on non-engineered seeps. The engineered seeps will be found in the NPDES permits. They don’t receive coverage however, they do expect that they would see results manifest themselves with the engineered seeps also. It is referenced that annual assessments will include looking at the engineered and non-engineered seeps because it’s the same source of the seep, and you expect to see results at both places.

Chairman Solomon clarified that engineered and non-engineered seeps were not used until this document. This is a new concept that wasn’t in Riverbend. He stated that some of the language might be reflected with some of the carry over text, and that he had the same question as Commissioner Puette did regarding when did DWR mean seeps generically and when where the terms engineered vs non-engineered used in the SOC. He asked staff how many changes were made to the agreement or recommended as a result that was received from the public? He stated that he didn’t see anything.

Commissioner Carroll answered that there were not any changes made as a result of comments, with the exception of this proposed deletion.

Chairman Solomon asked if his recommendation was that they accept it. Commissioner Carroll stated that he would make the motion that the EMC take the following action that they approve the proposed special order by consent with the deletion of the language in Assistant Secretary Holman’s March 7th letter and they authorize DEQ to take the SOC back to Duke as their final action for their acceptance or rejection. Commissioner Meiburg seconded the motion. Chairman Solomon asked for discussion on the motion.

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The Chairman directed everyone’s attention to page 14 of the agreement. He reiterated that on the signature page it is Duke Energy, and the Environmental Management Commission. It also says that Mr. Drakovick signed this on 1/8/18 which means it was signed before the public hearing was conducted and before Commissioner Carroll did his walk to look at seeps and before the EMC had any debate. He voiced concern that someone would take this at face value thinking that the EMC would be rubber stamping something. He stated that he felt the EMC had to have a commitment from Duke before going to public hearing and would expect Mr. Drakovick’s signature to acknowledge their commitment.

Further discussion was on page 5 of the SOC including the alternate language under consideration, should the EMC not approve it entirely today. The other question asked by a number of people in the public comment was if the $4,000 penalty that came out of the Riverbend document was now going to be applied universally to everything. The logic behind that penalty would have to put forth. He is interested in the $4,000 and as Commissioner Puette said, they just say 21 seeps. If you look up further in the document, it says non-engineered seeps but to him in a legal language, he would like to say for 21 non-engineered seeps if the penalty is for 21 non-engineered seeps.

Commissioner Carter commented that he agreed with the Chairman if they are going forward with the one that had a $4,000 penalty in Riverbend, but he didn’t see that as binding them to that forever. If there is public comment and they want to reconsider that amount and change it, that’s up to the negotiations with Duke and not a binding precedence just because it was in one order. He suggested that they shouldn’t be bound to that. He felt they do need to come up with the logic. He stated that they probably needed to look at it further and consult with the Department and see what makes sense in that regard. The other thought that he had suggested to him that maybe what they ought to be doing was to not have Duke sign anything before the public hearing, if the SOC was going out for public comment.

Chairman Solomon indicated that there was a process problem with that because they wanted Duke’s commitment.

Counsel Reynolds stated he wanted to remind the Commissioners of one practical aspect, that this was an application, in effect signing the application which will then be presented to go through the public process and be presented to the Commission. Their signature to the application seeking the SOC indicates these are the terms that are before the Commission to approve after it goes through the public comment process. It does not preclude the Commission from necessarily changing things or acting within its authority whether to modify, to approve or to deny it. It’s just part of the application process.

Chairman Solomon stated the issues of: admission; definition of seep qualified for engineered and non-engineered and the definition of what engineered-seeps are. The next point in agreement is that on page 8 – C1 it says that Duke Energy shall conduct a reassessment of contributing seeps including, but not limited to evaluation of proposed remedial actions. Is that all seeps or is that uncontrolled seeps? His bigger concern was that is if that is an independent evaluation or are the taxpayers of North Carolina paying for that. Is Duke Engineering paying for that or do we need to go to the General Assembly to get some budgets to pay for that. On the top of page 9, Duke shall conduct annual comprehensive surveys of the downgraded of ash basins, identifying new seeps. Are those all seeps or engineered seeps? What kind are those seeps, who’s paying for that and is that an independent assessment? Not stipulated agreement. One of the things that he sees differently is when goes down to Table B, page 25, monitoring requirements, in the hearing officer’s report there’s a statement made that for coal ash these all the things you should monitor, and this tells you what contamination is. There is no reference to that. The other comment he would add, is there a number of statements in the hearing officer’s report that’s separate from this agreement. There’s a lot of absolutes. This is what you test for. It also says if we just do these things,

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we’re going to protect public health. He didn’t know if a health based standard was being used. They need to consider not just for this one. He has the hearing officer’s report and they can make it right for this one, but he wanted modifications for future hearing officer’s reports. He has specifics that he can give the Department to use in the future hearing officer’s report as a template to address the public comments as future agreements are considered.

Commissioner Rubin commented that regarding the comment about public health, frequently a standard to protect environmental quality is more stringent than the standard to protect public health. Are we going to look at both of those or just the public health standards?

Chairman Solomon stated that issue was one of the items circling around that this Commission has not seen documentation on. He pulled key points out so that the Commission can consider fairly whether they want to make a motion pushing to accept the hearing officer’s report outright or to let Counsel give the EMC some options to have a motion to consider how to address those issues.

Commissioner Deerhake understood all the valid points that the Chairman has made and agreed they need to be addressed. Her question pertained to the process of representativeness. She wanted someone to provide an explanation of the method for designating which seeps are representing for monitoring purposes since there were several comments about that aspect.

Bob Sledge indicated that it wasn’t a concept of a representative seep, and it is not the choice of one particular seep to be representative of any other seep. The monitoring locations were shown on the map and it would be located downstream where the effects of the seeps would be seen. The water quality sample would be representative of everything that would be upstream where the seeps are occurring.

Commissioner Deerhake commented it could be multiple seeps influencing a representative sampling point. Mr. Sledge stated yes, if they all flowed to one point. If you look at the Cliffside S2, it’s not a seep. It’s a monitoring location but it collects the flow from a stream system that picks up three different seep influences. Commissioner Deerhake stated that there were comments sometimes suggesting that they didn’t think the sampling point was representative and asked for a response?

Mr. Sledge indicated that the main point was to see what the influence was on water quality in the receiving streams. Staff are looking at some places for upstream and downstream monitoring and see what the effects are from that effort. It is not designed for individual seep monitoring because for a lot of the seeps the flow is so low that you cannot get a good sample at the sites.

Commissioner Deerhake continued with monitoring and indicated that they have a total chromium parameter and whether there is a need to monitor for chromium+6 , which is the more toxic of the chromium ions. It was specifically monitored under RCRA for hazardous waste purposes. She didn’t know whether that was considered or not.

Assistant Secretary Holman stated they have a total chromium standard and they don’t have a hexavalent chromium standard for water quality. The total chromium is intended to represent all forms of chromium including hexavalent chromium.

Commissioner Deerhake stated that the parameter nitrite/nitrate is not exactly the same thing as total nitrogen, which is a more appropriate for water quality standard. Ms. Holman stated she would have to research that. Commissioner Deerhake indicated the interim action level table had a number of cells under columns for international level that are blank, and occasionally you’ll see a number. She asked why are some blank.

Mr. Sledge stated that for those that are blank, if there’s water quality monitoring, water quality standards would apply. The interim action levels are thresholds for enforcement. Like most SOCs, the

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applicant will show where they have a need for some type of relief and an interim action level is used. At other points there’s no indication that there’s any need of relief at those sites. Commissioner Deerhake stated made a recommendation to DWR to not leave a cell blank and rather placed something in the cell to explain what that means, whether it’s a footnote saying you’re defaulting to the standard just for completeness sake.

Commissioner Deerhake asked if the SOC defines NPDES permitting units or not? Mr. Sledge answered yes. She commented these additional engineered seep point sources will fall within the existing NPDES permits as a modification. Is that right? Mr. Sledge responded right.

Chairman Solomon stated that all seeps are in this agreement. Another point was that there was quite a bit of public discussion about not doing anything about illegal NPDES permits. He is just asking that question. If they’re doing it for illegal seeps or un-engineered seeps that are really permitted they might fall into that bunch. There might need to be some clarifying language around that too.

Commissioner Gillespie stated that he would like to see this Commission be more in support on something this important. It was clear to him that there are a lot of questions and Commissioner Carroll has made a motion. He could support that motion if they could work through the issues that have come up. If the body felt like we need to amend the motion, then they could amend the motion in order to have more consensus. He stated that he was in full support of the SOC to clean up the coal ash ponds. The question would be for Assistant Secretary Holman is on the process. He wanted to make sure that if the motion was withdrawn, can the Department come back in a timely manner whether special meeting or whatever needed and address these concerns, give the EMC some recommendations based on what they’ve heard. If so, can they do that? If they can’t do that within the 90-day timeline, what’s the problem with the motion being withdrawn putting it in with the SOCs that are coming up. Can they do this in a timely manner if they had the opportunity to address these issues that have been discussed today.

Assistant Secretary Holman stated that she believed that the issues heard today were items that they could address rather quickly working with Duke Energy and their representative’s concerns. We could do that and obviously the other path that you suggested which is repurposing this one and taking it back out to public hearing with additional ones, that’s also an option. I do think though that we’re fairly close and we’ve heard lots of issues. Part of it is a reflection of how quickly we’ve pushed forward from the public hearing stage. Obviously, there is some clarity that needs to be brought to bear. The Department is committed to moving as quickly as we can to address your concerns.

Commissioner Gillespie stated that he would prefer we do one of two things. I would prefer that the EMC either work through each of these issues today or have the motion withdrawn at which time there might be another motion needed to let the Department work through that process.

Commissioner Keen stated that the public hearing report from Commissioner Carroll, was presented to us, but yet there was a part of that public hearing that he heard previously that this letter today from staff was not any part of that public hearing. Was that correct? Commissioner Carroll stated the language was in the document. Commissioner Keen asked if the language that Assistant Secretary Holman was suggesting be deleted was included. Commissioner Carroll stated no, that letter was not in the public hearing. Chairman Solomon offered clarification on the hearing officer’s report.

Counsel Reynolds clarified it was and it wasn’t. The language that the Department is recommending be deleted was in front of the public for their comment and comments were made. As it was brought forward to the Commission today the Department is recommending that the language, this part

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of the language that had been out there, be stricken from the agreement. The Department’s recommendation to strike the language was not part of the public hearing but the language itself was.

Commissioner Keen stated that he wanted to build consensus to understand the fullness of how they are to address this today but move forward in a way that they can handle the others without the perception that they’re changing their methodology in thinking from a hearing officer’s standpoint with staff something that is different from what was at the hearing. It could be the same product but it’s in different language, and the public may not perceive it as that, so they have the day before they are to make this decision. He would like the SOC to go forward but to use this language as of March 7, in part of the motion there are too many unknowns, and he can’t support the motion. He would certainly support an amendment or withdraw it.

Commissioner Gillespie gave a list of the questions/concerns that the EMC had and stated that: (1) the penalty of $4,000, what was the rationale used to adopt that $4,000 penalty? Was that the correct rationale to use? Did the Department use the correct method in order to determine that $4,000; (2) Does the penalty include all the seeps or was it just engineered vs non-engineered seeps?; (3) DEQ language with removal of text per the March 7 letter; (4) Seeps having a definition; (5) Substituting EMC after DEQ in the documents because it needs to include the EMC; (6) A definition for engineered seeps; (7) An independent evaluation on the remedial actions. Was that done by an independent evaluation? Was the independent evaluation also done on the seeps?; (8) The monitoring requirements, as far as the limits, doesn’t really match Riverbend; and (9) Commissioner Keen’s points that he raised. (Attachment 1, page 34)

The Chairman added one from Commissioner Deerhake which was what was the source of the table and why did DEQ pick what they picked. Commissioner Deerhake stated that she heard the Chairman say there wasn’t a callout in the SOC for Attachment B, that the title of Attachment B was inconsistent with Riverbend’s title. Chairman stated that there was a Table B but it didn’t recite the source of Table B.

Commissioner Deerhake stated her request to complete the blank cells in Attachment A, clarify if they’re seeking nitrate/nitrite or total nitrogen as a water quality standard in Attachment B, clarify the representative sampling points text, and remove the word public health from the hearing officer’s report. She stated the other ones were consistent. You wanted in 2 A1 to say 21 non-engineered seeps rather than 21 seeps. There needs to be proper distinction between seep, engineered seep and non-engineered seep throughout.

Dr. Lazorick stated in addition to who’s going to do the evaluation and should be independent who’s going to pay for that evaluation, specifying that. Table B sets the limits but also the action limits, not just the measuring limits, effluent limitations and provide action levels.

Commissioner Puette stated that in 2 A1 on page 5 where it says no penalty shall be assessed for seeps identified after December 31, 2014. He didn’t know if that included all seeps or just engineered seeps.

Commissioner Rubin asked requested making discharge standards public health related and environmental receptor related, whichever is most stringent.

Commissioner Carter had clarification on that. The language of the citizen suit is that no action may be commenced if the administrator or state has commenced and is diligently prosecuting a civil or criminal action in a Court of the United States or a state that’s specific to a civil or criminal action in a court. That’s not what an SOC is.

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Commissioner Keen stated that the letter two years ago dated August 19, 2016 from the Environmental Protection Agency (EPA), is pretty explicit that the EPA does not currently have enough information to determine where the seeps emerged or reached jurisdictional waters of the United States. We recommend that the United States Corps of Engineers verify any jurisdiction determination before the permit is finalized, proposed permit offering discharges. He requested staff get an update since this letter was two years old and it talks about compliance period until November 1, 2018.

Chairman Solomon indicated that Counsel was adding that to the list and asked if Commissioner Gillespie had another one as well. Commissioner Gillespie stated that his issue was covered in the SOC and maybe Assistant Secretary Holman could address it but he thought that it was covered in the statements regarding where the Corps still has jurisdiction.

Commissioner Meiburg commented on some of the observations that had been made. He stated that first of all just as a process matter, the fact that there was something signed before public comment is not a valid objection. If you’re going to have an agreement and this is true in federal action, you’ve got to have an agreement. Somebody’s got to agree to something. If you’re doing it in a court, you can lodge something with the court and before it is actually entered, you can have some public comment on it. So that really is a process matter and doesn’t bother him at all. Secondly, the engineered vs non-engineered seeps, in the letter the definition is un-engineered seeps that are not discharged to an engineered outfall or collected rerouting to an engineered outfall. That’s basically what an un-engineered seep is. It’s noted that it’s difficult to measure them because they pop up in places you don’t expect and you don’t even get continuous flow.

Chairman Solomon stated because EPA uses a federal agency term, it doesn’t mean it is an engineering term. The implication applies to the public as a different matter. It can be caveated in the way it’s used in the hearing officer’s report. He did think that he had a definition that they can use that. We just have to get a consistent definition and make sure that they are talking the same language.

Commissioner Meiburg indicated the third point was that he thought none of them would want to do was delay necessary decanting because the ultimate solution to those things was to go ahead and decant those things so they can be properly treated. That was his one reservation about further delay of the decanting. His instinct was that it would not because the decanting needed to occur in any event, but you want to make sure that was the case. Finally, just an observation more than anything else about the Commission’s role in negating seeps. The Commission has gone into so much detail on this one that he was a bit uneasy from his past experience. It’s only before us because the Department decided to do something you would otherwise want them to do which is to go out and seek public comment. That’s the only reason we are having this discussion and something we ought to consider as a Commission what our relative authority and responsibility are on doing these things.

Counselor Reynolds stated for these points of clarification or additional issues that you want staff to work through, for those that apply to the hearing officer’s report, he wanted to be clear that the report is what the report is already, and you are only seeking clarification to some of the responses that were provided in the report. Not to changes to the report itself.

Chairman Solomon responded, no. The Commission has accepted the report and Commissioner Carroll has done the final report. The EMC just need to get the language in the SOC worked out. He was concerned more about using the report in the future as a template and wanted to have members to start looking at that to make sure that’s aligned.

Commissioner Carroll stated that he had heard a great deal of discussion, suggestions and comments on the text and what was in it, what isn’t in and what should be in it. What you have in front of

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you is the work product of your staff, DEQ who have put this together with the idea of solving a problem and moving the process forward. As far as this particular agreement goes, he hadn’t heard anything that persuades him from not proceeding with it, and getting moving on dewatering those coal ash ponds. It only applies to three sites. This is a limited solution and it’s designed to move forward and the process can be refined in moving to the next one. He sees no reason based on what he heard not to go ahead with this request.

Chairman Solomon stated the motion was to approve this action plan with the language stricken by the Department, that one paragraph and leave everything else standing. Commissioner Carroll interjected with to take it to Duke for them to accept or reject. Commissioner Meiburg seconded the motion. Commissioners Carroll, Anderson, Carter, Meiburg and Rubin voted yes. Chairman Solomon, Commissioners Deerhake, Gillespie, Keen, Lazorick and Puette voted No. The motion failed six to five.

Commissioner Gillespie made a motion that the EMC direct DEQ to come back to the Commission as soon as they can with recommendations or changes for the Commission to consider. Commissioner Keen seconded the motion. The Chairman asked for discussion on this motion. The Chairman asked Commissioner Gillespie if he would like to add a time to the motion and he responded that he would let the Chairman amend the motion and he would agree. Chairman Solomon stated that this issue be resolved by their next meeting and if the Department tells the EMC they are prepared to go before that time, the EMC would consider to a special meeting. Commissioner Gillespie stated he would amend his motion to include that information and Commissioner Keen seconded.

Counselor Reynolds indicated to Commissioner Gillespie that he intended for the Department to not only to provide information for the Commission, but where changes might be necessary based on the direction of the Commission to consult with Duke to ensure that they would consent with that. That would not prohibit the Commission from proceeding as a special order with consent, but in the event, that Duke would consent to one or two changes in the SOC where that might be necessary. He wanted to ensure that he was allowing them to consider consulting with them. Commissioner Gillespie stated that he would leave that up to the Department on what they would prefer and see the best way to handle that.

Chairman Solomon stated since they were asking the Department to go back to Duke and facilitate these discussions or these agreements, he felt it appropriate to hear from the Department.

Commissioner Puette stated that he was sure that the Department has a list of the EMC’s concerns. Assistant Secretary Holman indicated they did have the list and if there was any confusion they can go back to the audio recording to verify that. If that fails, we’ll contact you to say can you tell me what you meant.

Counsel Reynolds stated that the motion by Commissioner Gillespie moved to direct DEQ to come back with recommendations and changes based on the expressed concerns and comments made by the Commission today and to effectively defer action until the next Commission meeting on this matter.

Commissioner Gillespie additionally stated whether, or not to allow DEQ to reach consensus with Duke if they could or not would depend on whether, or not Assistant Secretary Holman would like to do that.

Assistant Secretary Holman responded that to be very clear, the Department is very interested in taking the concerns of the Commission back and having a discussion and successful negotiation with Duke to bring a revised SOC back to the Commission addressing their issues.

Commissioner Gillespie commented that cleared it up. Therefore, he would amend that also DEQ can consult with Duke and try to bring the Commission back a consensus document. Commissioner Keen seconded the amended motion.

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Chairman Solomon stated they have a motion by Commissioner Gillespie to basically direct the Department to address all the issues that the Commission previously listed in the motion, and not only get information on that for them but to direct them to go out and try to reach consensus with Duke on an agreement and to report back on the status of that by the May EMC meeting, or as amended before if possible where the Commission can consider a special meeting if needed or if they consider appropriate.

All Commissioners voted yes on the amended motion, so the motion passed unanimously.

Agenda Item 18-27: Cary-Apex 2015 IBT Certificate Modification

Chairman Solomon turned the meeting over to Commissioner Rubin since Chairman Solomon had a conflict of interest in this item. If the Commission needs to discuss in detail, there will be a closed session. Chairman Solomon then left the room.

Commissioner Rubin asked if the Commission needed discussion and did they need to clear the room.

Counsel Phillip Reynolds indicated that the decision whether, to enter into closed session under the Open Meetings Law is before a Commission to discuss pending litigation in the event that the Commission wanted to discuss with him further impacts of this action and potential impacts of this action, however he would say that this matter came before the Commission at its last meeting. After discussion in closed session and further discussion and action in open session, the Commission delegated authority to him to represent to the Court that it agreed to the terms of the Consent Judgement which he brought before the Commission at its last meeting. The action item coming forward to the Commission today is the execution of that Consent Judgement which was entered in and approved by the Court. Now the Court has ordered the Commission with their consent and the consent of the parties to reissue the Cary-Apex IBT Certificate. It is being reissued identical to in accordance with the Consent Judgement, but also identical to the certificate that the Commission issued earlier, with the exception, of an additional condition nine which contains provisions related to a return formula for water to be returned to the Cape Fear River basin. That was consensus to both the Commission and the Department. It was his recommendation that the Commission approved the reissuance of the certificate as it was provided to you in advance of the meeting and as published to the website.

Commissioner Rubin indicated there were seven orders that were at the end of the judgement and it was real clear except for condition nine that it does remain identical.

Counsel Reynolds stated just for the contacts for those that may not had been there or recalled, there were several conditions of issue in the challenge to the certificate. The Administrative Law Judge ruled that condition seven which is a reopening or cause should be stricken from the certificate. This Consent Judgement overturns the ALJ’s order. It is replacing it in its entirety as described in the Consent Judgement which has been provided to the Commission. Therefore, leaving in placed condition seven, adding in condition nine and fully resolving the litigation and the matters that issue pertain to that litigation. This is the final act related to the item that the Commission needs to do in compliance with the Consent Judgement which the Court approved.

Commissioner Rubin questioned the Commission if this was something that they wanted to discuss or something that they simply want to turn over to Commission Counsel.

Commissioner Gillespie stated that the Vice-Chair, Commissioner Whisnant and himself were involved in this as the appointed sub-committee. It was his understanding that they agreed to make a

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recommendation to approve this reissuance of this certificate and he would make the motion at the proper time.

Commissioner Gillespie moved to reissue the IBT Certificate in accordance with the consent order, which was seconded by Commissioner Keen. Hearing no further discussions, the Commissioner Rubin called for a vote and the motion passed unanimously.

Having concluded action on the item, Commissioner Rubin turned the meeting back over to Chairman Solomon.

IV. Concluding Remarks

By Directors

Annette Lucas, Division of Energy, Mineral and Land Resources

Annette Lucas presented director’s comments for the Division of Energy, Mineral and Land in Interim Director Toby Vinson’s absence. She gave a summary of actions of the Stormwater and Dam Safety Programs consisting of:

Dam Safety rules 02K .0212 – Additional Design Requirements

Stormwater rules 02B .0620 through .0624 – Water Supply Watershed

Stormwater Program updates

For this update Ms. Lucas stated that DEMLR was submitting its annual report on enforcement, ordinance approval, and designation activities relating to the Water Supply Watershed, USMP, and Phase 2 stormwater programs.

Michael E. Scott, Director of Division of Waste Management

DWM staff continue to coordinate with DWR, DAQ and local partners regarding the Chemours plant in Bladen County. Gen X has been found above the provisional health goal of 140ppt in over 150 private wells thus far (2/18). Chemours has expanded the private well sampling radius to approximately 2.5 miles from the facility boundary with specific sampling areas focused to the North, Northeast and Southwestern areas around the plant. Robeson county has also started private well testing. They have detected GenX but levels are not above the provisional health goal of 140 ppt. Currently working on impacts from this facility in Cumberland, Bladen, and Robeson counties. Beginning a pilot study to look at granular activated carbon as an alternate water treatment source until more long-term solutions can be selected and engineered to include water lines and alternate water sources. Have also completed fish tissue testing this week.

DWM continues to work diligently with DWR and DEMLR on seeking a partial program approval from EPA to administer a coal combustion residuals program. Draft proposed rules will be submitted to the EMC for consideration in early 2018. The Divisions have had productive stakeholder conversations regarding the proposed rules, across the state, at three different

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information sessions since the last EMC meeting in January. We have received substantive feedback on rules and requests for continued feedback possibilities such as through additional meeting(s). Still looking to bring proposed rules forward to Committee in May of this year as we look at partial program approval through EPA for the coal combustion residual program.

The Division did provide an overview, in February, to the Environmental Review Commission regarding the Electronics Program. Specific items covered included the changing waste stream, including the transition from televisions containing cathode ray tubes to flat screen televisions, and the current status of North Carolina's recycling system, including markets, cost and financing issues.

In the Underground Storage Tank section, the periodic review reports for 15A NCAC 02L, 02N, 02O, and 02P were approved by the RRC at the February meeting, and have been sent to the APO for review.

In the Hazardous Waste section, the RRC approved the 15A NCAC 13A rules for readoption/amendment at the February meeting. The rules have an effective date of March 1, 2018.

Director Michael Abraczinskas, Division of Air Quality DivisionThe official record contains brief updates for three items: 1) a report pursuant to Section 12(b) of

Session Law 2017-211 for vehicle inspection and maintenance was due to the General Assembly March 1, 2018; 2) the DAQ will soon be scheduling stakeholder meetings pertaining to the Volkswagen mitigation trust to get feedback on a draft mitigation plan; and 3) ozone season started March 1, 2018. The Director’s Office presented a 50-minute update to the AQC on the DAQ’s engagement on GenX emissions in North Carolina. There are many questions that need to be answered and the DAQ looks forward to providing concrete answers and actions.

Director Linda Culpepper, Division of Water Resources

Director Culpepper alerted the Commission that House Bill 189 Water Safety Act has been currently been referred to the House Select Committee on North Carolina River Quality. It talks about discussions on research and regulatory needs for emerging contaminants. She spoke of Earth Day which is coming up on April 22 and the theme for 2018 is “End Plastic Pollution”. She thanked the Commission for all that they do and staff as well, all that they do every day to work towards the environment and public health. On outreach, Jessica Godreau is talking to the Association of State Drinking Water Administrators on fluorinated compounds. Linwood Peele is going to be talking with the Green Energy Council about resiliency and how it supports sustainable green infrastructure here in North Carolina. Tom Fransen participated last week in a water resource topic on scarcity and quality issues and solutions sponsored by the N. C. State Wolfpack Student Association on outreach. She indicated that they were working toward sharing those ideas and those hard issues that are exploring options related to long term issues and water management and the potential solutions that are out there.

Chairman Solomon thanked Director Abraczinskas that it was a big milestone as far as they had been on CO2 and that issuance coming through. He indicated his appreciation to Director Culpepper, Director Abraczinskas and all directors for the strategic issues going on.

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Assistant Director Sheila Holman for the Environment

She thanked the Commission and appreciated that they were very careful in deliberate considerations of the many issues before them and all the input on their SOC process on coal ash. She stated that it would end up being stronger and especially thanked the staff and Commissioner Carroll for all their work in meeting those near impossible deadlines. She indicated to the Commission that the next Secretary of Science Advisory Board is currently scheduled for March 19. At the meeting that was held back on January 29, the Board recommended to DHHS. Chemours gave approval for them to share all the health studies. Some of that had confidential business information material contained in it. The company allowed them to share that information, not only with the SAB members, but publicly which is now posted on the SAB website. After seeing the data that the experts on the SAB recommended that DHHS look at developing benchmark dose modeling so that you are not looking at a single starting point for which to calculate a health goal or reference dose just based on one endpoint from one study. That work is ongoing and they will hear an update of that at the March 19 meeting. She is trying to get Dr. Bartram there to meet the Commission. On the Chemours front she wanted to assure the Commission that work continues every day in DEQ, especially from the three divisions that they had already heard from and it will continue every day to get answers and to best understand this situation. Also, looking ahead on how they best manage emerging compounds as they go forward. Regarding the CCR, they did have three public hearings. They’ve got a lot of concern expressed about releasing 90 pages of rules just a few days before the first public comment and before the first public meeting. The stakeholder meeting was to set the stage that this is where we are in the process and here’s some draft rules and they wanted comments, and they have until March 22 to respond back. Hearing those concerns about not having enough time, they decided to extend that comment period until the end of March. They are currently scheduling one more stakeholder meeting later that month. They are continually trying to get input on that front and they will be back with some draft rules to the committees in May.

Chairman Solomon commented to Director Holman to just keep the Commission apprised looking ahead for emerging contaminants. If there were actions that they needed to take or temporary rules to give the Commission the most advanced warning that they could. Director Holman indicated that any insight that the Commission may have that they may not have thought of, they would welcome that feedback.

By Committee Chairs

Committee Chair Rubin stated the Water Quality Committee met and they discussed at length the 303(d) listings and they approved to move to the Commission today and it passed today. They talked very briefly about some of the work they’re doing with nutrients, the stormwater report and other information items.

Committee Chair Puette reported on the Groundwater and Waste Management Committee they adopted the minutes from their special meeting on February 7 and they authorized going out for public comment the rules dealing with scrap tire management. They heard one information item.

Committee Chair Meiburg stated the GenX air emissions was a fascinating information briefing. The work that is going on in North Carolina really was cutting edge work. He was glad to hear that EPA was being helpful too. Moving ahead with rule additions and session law, they had a concept briefing on that. He gave thanks to Director Abraczinskas and his staff for the assistance with the petition on carbon

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dioxide emissions. This was one in which there was a lot of interest and passion around it. Given that they handled that in a very appropriate way and he very much appreciated the support of the Department.

Dr. Lazorick thanked Commissioner Carroll for being the hearing officer for a very difficult meeting and setting the bar for how much needs to go into the reports that was pretty, complicated.

Commissioner Keen stated he appreciated the efforts that Commissioner Carroll took to be the hearing officer and continue to work in that direction in moving forward to find answers.

Commissioner Gillespie state that his focus was on April 18 which was his retirement date.Commissioner Deerhake mentioned that the next Wednesday and Thursday is the North Carolina

Resources Research Institute’s annual meeting in Raleigh at McKimmon Center. Commissioner Carter commented on the process that they were engaged with on the Duke

action item. He didn’t understand why having a public meeting should trigger that entire activity having to move to the Commission. The divisions are authorized to hold public meetings on permits and other types of matters. He didn’t understand that rule was written that way and felt that it needed to be changed.

By Counsel

Counsel Reynolds stated he appreciated everyone allowing him to catch and get up to speed on some of the issues. He thanked the Commission for their continued efforts.

By Chairman

Chairman Solomon thanked Commissioner Carroll for being the hearing officer. . With no further business before the Commission, the Chairman adjourned the meeting at 4:02 p.m.

Approved this 11th day of May 2018.

J. D. Solomon, Chairman of the EMC

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Attachment 1

EMC Questions & Concerns from March 8, 2018 Discussion of S17-009

1. What is the rationale for the upfront penalty?

2. Does the upfront penalty include all seeps, engineered and non-engineered?

3. Replacement of Upfront Penalty Language.

4. Definition of seeps – engineered and non-engineered.

5. Were independent evaluations of the coal ash basins performed?

6. Will there be an independent evaluation of the seeps? Who will pay for such investigations?

7. Monitoring requirements don’t match those in the Riverbend SOC (parameters, limits, etc.)

8. What was the rationale for the choices of characteristics included in the Attachment B?

9. Clarify the term “representative” monitoring.

10. Don’t include blank boxes in Attachment A. State what is implied by the empty space.

11. Substitute EMC for DEQ at places within document.

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