Toxins in the ground: Inside America's most polluted coal ash site and industry's struggle with federal rules

by Catherine Morehouse | May 6, 2019

Photo by Catherine Morehouse, Utility Dive


In the fall of 2017, Jason Peeler flew over his cattle ranch, a little over 40 miles south of San Antonio. The weather was dry, "bone dry," but he noticed something unusual: There was water sitting on a portion of his land he had not stepped foot on in years. That’s when he realized something was amiss with the land his family had leased to the San Miguel Electric Cooperative (SMEC) three decades earlier.

The 391 MW San Miguel coal plant burns just meters from the family's home, visible far down the rural highway that leads to the ranch — the single stack's steady billow stands out among the miles of rolling Texas hills.

Three ponds stand next to the plant; the daily task of two is to absorb dry coal ash, the byproduct of burning coal. Water turns the ash into a heavy sludge of toxic metals, and gravity pulls the concoction further below ground.

"I had no idea there was so much information about coal ash, and so much bad information about coal ash," Peeler told Utility Dive while driving over the old mining area, which had ceased operation about a decade earlier. It was his great-grandfather who started buying up the land in the early 1900s. His father, Alonzo Peeler, currently lives on the ranch.

In March of this year the co-op’s coal plant, set to remain open until 2037, was named the most contaminated in the country by the Environmental Integrity Project (EIP), reporting unsafe levels of at least 12 coal ash contaminants.

Now, the family wants their land restored to its original condition.

"There were people screaming and hollering a long time ago, you just didn't listen," Jason Peeler said. "You hear them talk about dirty coal and think: ‘OK, I don't really see that much coming out the stack.’ I thought they were doing a pretty good job of getting all that stuff out. Anyways, it turns out they were — they were pulling it all out and stacking it on our property."

The Peelers’ story and the land they live on is a microcosm of a problem utilities are facing today: Data from electric companies across the country show that almost every coal plant in the country is contaminating the ground they sit on with chemicals, many of them toxic.

For utilities that have dealt with adverse impacts of the contamination publicly, pressure to clean up is mounting. But the federal regulations intended to direct cleanup efforts leave many dumpsites untouched, and the Environmental Protection Agency is in the process of eroding oversight further in a rulemaking proceeding that began in March of last year.

The cost of coal

Over 100 million tons of coal ash are produced each year, according to the American Coal Ash Association (ACAA). Utilities that burn coal-fired power mix the dry ash with water to create the thick sludge stored in coal ash "ponds" near plants.

In 2008, over 1 billion gallons of coal ash spilled from a Tennessee Valley Authority (TVA) coal waste pond. The full impact of the disaster did not register until almost 10 years later, when the death of over 30 workers and the terminal illnesses of 300 more built the case that cleaning up the toxic metals without proper protective gear can be fatal.

The EPA responded to that spill and the 2014 Duke Energy spill in North Carolina by establishing federal coal combustion residual (CCR) rules in 2015 to monitor coal ash disposal, requiring all utilities to report ground monitoring data from their sites.

Results from those filings, compiled by the Environmental Integrity Project (EIP), Earthjustice and the Sierra Club, found that over 90% of coal plants in the U.S. reported unsafe levels of one or more of a host of toxic chemicals near their coal plants.

The Peelers’ story was featured prominently in a similar report released in January the environmental groups compiled, focused on contamination in Texas.

Some metals found in coal ash, such as radium, arsenic and chromium, can have adverse health effects ranging from skin conditions to cancer if the contaminants are ingested through drinking water or are in the fish someone consumes.

High-profile coal ash spills, such as TVA’s and Duke’s, increase pressure on utilities to upgrade their facilities. Clay liners beginning to wear out can lead to leaks, and some basins have no lining at all, leaving bottom groundwater vulnerable to the fluid toxic metals.

Contamination at San Miguel

The Peelers are concerned about two main disposal sites: the ponds and the old mine. The coal mine is unregulated by federal CCR rules but actively taking in coal ash. Instead, regulation is left to state regulators, in this case the Texas Railroad Commission.

The land directly adjacent to the coal ash ponds is covered in a dry, frosty-white haze, likely related to levels of sulfate reporting 20 times EPA-established safe levels found in the co-op’s ground monitoring filings. Sulfate is not toxic to humans but does have adverse effects on the environment at such high levels, evident by the pale algal growths covering dead branches across the ground.

Lifeless shrubs dot the eerie brown-gray landscape. Though March is bluebonnet season, there is no sign of plant life across the terrain that stretches below the ponds. Water visibly leaks from under the fence in a thin ribbon that Jason Peeler says is always there, "Even when it’s really dry" from the cracks he says are in the clay liners at the base of the ponds.

The 12 contaminants found include beryllium, cobalt, cadmium and lithium, known to cause lung damage, blood disease, kidney damage and birth defects, among other adverse impacts.

Because the Peelers largely stayed off the leased land until recently, they say they haven’t experienced any adverse health effects. Fish they used to keep in tanks are now all dead from the contaminated water that trickles through the ground, pooling in larger bodies downhill from the mine. They say their cattle will never be able to graze on the approximately 30% of the ranch the co-op has been on.

Contaminants reported at the San Miguel plant site
Contaminant Times above safe levels Potential effects of contaminant
Arsenic 7 Known to cause multiple cancers, neurological damage, skin conditions
Beryllium 138 Lung damage and pneumonia
Boron 23 Developmental and reproductive toxicity
Cadmium 124 Kidney damage, likely carcinogen according to the EPA
Cobalt 522 Blood disease and thyroid damage
Fluoride 3 Neurotoxin, causes tooth and bone damage
Lithium 93 Kidney damage, neurological damage, birth defects, decreased thyroid function
Mercury 3 Neurotoxin
Radium 6 Radioactive, linked to several cancers
Selenium 8 Toxic to skin, blood, nervous system
Sulfate 20 Can irritate eyes and skin but not toxic
Thallium 9 Liver and kidney damage, hair loss

Duke Energy’s Allen Steam Station in North Carolina and PacifiCorp’s Jim Bridger power plant in Wyoming are the second and third most polluted plant sites in the country, according to the Earthjustice report, two investor-owned utilities notably larger than the co-op. The family and their lawyer say that because San Miguel burns lignite, which is a low-grade coal that burns less efficiently, there is likely more discharge from the scrubbers.

"Clearly, the way [the ponds have] been operated and the content of the coal they use has caused a far bigger problem, more expansive problem than some of those bigger units" across the country, the Peelers’ main attorney, Mary Whittle, told Utility Dive.

Photo by the Peeler family

The co-op disputes the methodology used to rank it as the most contaminated in the country, contending that EIP "does not take into account situations, like San Miguel, where the groundwater in question was previously impacted by naturally occurring levels of constituents making it unfit to drink," it told Utility Dive in an emailed FAQ sheet about the site.

In such cases, power providers can make alternate source demonstrations to prove that some contaminants exist at elevated levels unrelated to their operations.

But the alternate site San Miguel used in its testing was around the mine, according to Whittle, where they also dump coal ash.

"By comparing those two things, their conclusion was, ‘So it’s all naturally occurring, there’s no problem here,’ as opposed to recognizing that everything is contaminated. It just sort of boggles the mind. And that unfortunately is the way that coal ash rule works; it allows companies to make this alternate source demonstration."

“The Obama administration, when they developed this rule, realized there were certain levels of risk that couldn't be exceeded and if you do exceed those risks you have to take the steps necessary.”

Jim RoewerExecutive Director, Utility Solid Waste Activities Group, Edison Electric Institute

Lawyers for the family are doing independent testing around the ponds and mining area. Although they can’t share that data with Utility Dive because they have not gone to trial yet, their "investigation supports [their] allegations," said Whittle.

Other utilities and industry groups also contend the results of the federal rule are misleading, and only represent the first step in a longer process of establishing whether they should be concerned about pollution or not.

Initial detection "is the first of many steps in this process," Stephen Bell, Director of Media and Public Relations at the National Rural Electric Cooperative Association (NRECA), told Utility Dive in an email.

"What’s interesting when you take a look at the report is [Environmental Integrity Project] and their allies developed an entirely new approach to analyzing the data," Jim Roewer, Executive Director of the Utility Solid Waste Activities Group at the Edison Electric Institute, told Utility Dive.

"The Obama administration, when they developed this rule, realized there were certain levels of risk that couldn't be exceeded and if you do exceed those risks you have to take the steps necessary," he said.

Some states require additional testing a certain distance from the facility and, echoing San Miguel, Roewer cautioned, "When you start to go out and test, I think you need to be careful. There’s naturally occurring constituents across the country that could lead to concerns that aren’t necessarily attributable to coal ash."

Federal rules in flux

The EPA issued a final rule in July on the federal coal ash regulations, giving utilities more time to file groundwater reports and take remedial action, in response to pressure from the industry.

The second phase of the rollback is set to come out later this year, and will address "specific technical issues ... raised in litigation of the final CCR rule," according to the EPA, which sent Utility Dive previously released press statements in response to questions about the regulations.

NRECA and other generator groups support the rollbacks, while environmentalists argue gaps still exist in the rule as it stands, and less oversight will only allow active pollution to continue. In August, the D.C. Court of Appeals sided with environmentalists, ruling that the current federal rules do not do enough to address coal ash pollution.

“As I get older my mind's changing on a lot of things. You want the sovereignty of a state to stay in place, but the natural resources is different. ... Polluted air moves around. Bad water can affect people all over the place.”

Jason PeelerRancher

One portion of coal waste disposal current federal rules do not regulate is mine dumping, which, for the Peelers, seems like an obvious oversight.

While mining on their property ended in the early 2000s, San Miguel continues to discard waste in the area, building up a mountain of fly ash that stretches hundreds of feet underground and overlooks a shallow aquifer, which is "purging back into the old mines and then leaking back through the fly ash and digging up all the heavy metals," according to Jason Peeler.

The Peelers worry that water downstream of the old mine has been impacted and could be flowing into a nearby creek which feeds into the Atascosa and Nueces Rivers, two primary sources of drinking water for the city of Corpus Christi, about 115 miles southeast of Atascosa county.

San Miguel "has data suggesting the presence of some constituents in the groundwater wells located on SMEC’s property," according to the co-op, adding they "will continue monitoring groundwater conditions at the power plant and the mine" and "address the issue in accordance with environmental laws" if contamination exists.

Utilities call for flexibility, enviros call for oversight

Six to eight years ago Jason Peeler said he "would have been riding the line of a government overreach" when it comes to federal coal ash regulation, but he now thinks differently.

"As I get older my mind’s changing on a lot of things. You want the sovereignty of a state to stay in place, but the natural resources is different," he said. "They affect everybody, everywhere and so there might be a spot where it’s more effective for the federal government to have the bigger umbrella, the bigger blanket to cover it all. Polluted air moves around. Bad water can affect people all over the place."

What power providers essentially want to see out of the rollbacks is flexibility in site-specific requirements as well as extended timelines for filing compliance orders.

“[T]he dangers are that when the waste is unregulated ... You're going to have the waste causing the same problems, but people being unaware of that contamination and having very little recourse.”

Lisa EvansSenior Counsel, Earthjustice

Utilities will save an estimated $28 million-$31 million a year in regulatory costs from the first phase of rollbacks, according to the EPA.

NRECA supports the rollbacks, said Bell, while environmentalists fear providing more site flexibility and a longer timeline is not reflective of the urgency the situation calls for.

The results of the coal ash report show that coal ash contamination exists everywhere there is an unlined basin, said Lisa Evans, senior counsel at Earthjustice making federally unregulated areas even more of a concern.

"Coal ash itself doesn’t know the difference of whether it’s in a pond, a landfill, a structural fill, a mine. Wherever you put it, it’s going to generally behave the same way," she said. "So the dangers are that when the waste is unregulated ... you’re going to have the waste causing the same problems, but people being unaware of that contamination and having very little recourse."

The cost of cleanup

For environmentalists, the fight for coal ash regulations has been decades long. For the Peelers, the fight is just beginning, but they know what they want the outcome to be.

"What we want is for [San Miguel] to clean up their property like they said they were going to do," said Jason Peeler. "They’re supposed to mine, then reclaim, then give it back."

In August of this year, the Peelers informed the co-op that the terms of their lease was up. San Miguel responded with an eminent domain suit, threatening to condemn the leased portion of the land.

"San Miguel would prefer to avoid using condemnation," they told Utility Dive in a statement, but filed the suit in order to maintain access to the land. The co-op said that it is "in full compliance" with the regulatory timeline set in place by the Texas Railroad Commission and has since temporarily dewatered some of its sites as part of its negotiations with the Peelers to "expedite reclamation."

"The Peeler’s threat to prevent San Miguel from accessing the leased land puts San Miguel at risk of violating state and federal regulations," the co-op added.

Cleanup costs vary from utility to utility based "on various site specific factors," according to Roewer. "The scope and cost of ‘cleanup’ depend on what the extent of groundwater and/or surface water impacts. For example, groundwater remediation costs vary regarding what constituent you need to treat."

“Coal may be cheaper in the short run, but there is a massive expense in the end that no one is accounting for, so it will be subsidized. Somebody's paying to clean it up.”

Jason PeelerRancher

Utilities and environmentalists disagree on the most effective means of closure. Green groups for years have said the only way to effectively close ash ponds is to fully excavate the ponds and either move them into dry, plastic-lined basins, or recycle portions of the ash, but utilities tend to prefer cap-in-place methods.

S​tate lawmakers are beginning to agree with environmentalists.

In North Carolina and Virginia, Duke Energy and Dominion Energy were ordered to completely remove all the ash from their ponds. Virginia’s law explicitly calls for Dominion to recycle a quarter of its ash as well.

Along with mine disposal, recycling coal ash for concrete has risen in recent years, a trend Executive Director of the American Coal Ash Association Thomas Adams said he’d like to see continue.

"We know in the concrete markets there are a number of technical issues that really support a continued high demand [of coal ash]," he said.

Out of the 38 million tons of coal ash produced in 2017, 24 million tons were put to productive use, he noted, which begs the question: "How do we close that gap? ... Why are we disposing 14 million tons of material if the demand is so great?"

Both Duke and Dominion resisted state plans to excavate.

Dominion’s initially estimated costs would fall between $2.6 billion and $6.5 billion, but it later reduced those estimates to $2.3 billion-$5.6 billion. Duke currently estimates that its closure and excavation costs will add $4 billion-$5 billion to the current $5.6 billion cleanup and plans to resist the state’s excavation order.

TVA estimates closure costs will range from $3.5 million-$200 million for closure in place, to $20 million-$2.3 billion for full excavation, and San Miguel said it has spent "millions" in environmental restoration.

The Peelers are still in their pre-trial procedure, and the trial date is set for July 20, 2020. Meanwhile, part two of the federal rule is projected to come out by June of this year.

"Coal may be cheaper in the short run, but there is a massive expense in the end that no one is accounting for, so it will be subsidized. Somebody’s paying to clean it up," said Jason Peeler. "There is a huge cost to coal that we’ve literally been burying for years."

This article has been updated to clarify that the Texas Railroad Commission regulates coal mines in Texas.