White Paper

Comprehensive Coal Combustion Residuals Risk Management

HDR Coal Combustion Residuals Management Advisory Team

July 2010

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Comprehensive Coal Combustion Residuals Risk Management

Table of Contents Risk: More than Meets the Eye ............................................................................... 3 Evaluating Immediate Risks and Needs .................................................................. 4 Stability/Structural Enhancement ............................................................................ 5 Water Quality Mitigation, Leachate Treatment and Management....................... 5 Closure/Decommissioning ....................................................................................... 5 Siting for New or Replacement Facilities ................................................................ 6 Reuse Options ............................................................................................................. 6 Conceptual/Preliminary Engineering and Cost Estimates ................................... 6 for Retrofitted, New or Relocated Facilities Permitting..................................................................................................................... 7 Operational Implications ........................................................................................... 7 Risk Assessment and Management .......................................................................... 8 Regulatory Tracking and Analysis ............................................................................ 10

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Comprehensive Coal Combustion Residuals (CCR) Risk Management Utilities faced with a changing regulatory environment for coal combustion residuals management face an array of potential actions to consider. From dredging, capping and remediating ash impoundments to investigating groundwater and designing or decommissioning disposal sites there are options and critical decisions to be made. Coal combustion residuals, or CCR, includes bottom ash, fly ash, slag and flue gas particles that must be managed and disposed of safely. Understanding the risks associated with ash management and analyzing potential impacts of an array of options will help utilities make informed decisions even in the face of regulatory uncertainty. Risk: More than Meets the Eye On December 22, 2008, an ash dike ruptured at an 84-acre solid waste containment area at the Tennessee Valley Authority’s Kingston Fossil Plant in Roane County, Tennessee, releasing 1.1 billion gallons of coal fly ash slurry. It was the largest fly ash release in United States history. This paper offers concepts that will be useful to utility ash managers in assessing the multiple risks associated with options to manage CCR. Traditionally, environmental and economic risks have been considered key, but the rise of a more engaged and informed public extends potential risks beyond the boundaries of a power plant. Today, utility managers must understand that risk can extend to society at large, especially when an event such as the Kingston spill—or more recently, the BP oil spill in the Gulf of Mexico—unexpectedly engages an otherwise disassociated public in the operations of a business or facility. Events such as the Kingston and BP spills result in large costs and heightened scrutiny. Many companies have long prospered by ignoring what economists call “externalities”—costs or benefits not accounted for through prices. But the realities of today compel business managers, including utilities, to embrace the impact of externalities on their day-to-day operations. By embracing, or put another way, accepting the reality that externalities will affect your business model, you can be better prepared to confront emerging trends in three areas: • • •

The growth of business and the resulting increase in impacts from business decisions Improvements in sensors that measure impacts Heightened sensibilities of stakeholders

What this means is that the demand and the expectation that businesses will operate responsibly have dramatically increased. Developing a risk management approach based on an “externalities framework” can help you respond rationally and in a way

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that is defensible and transparent to stakeholders. Utility management also will benefit from having a range of information to set the stage for developing a sound business case for CCR risk management. The following materials summarize available options and provide an introduction to the comprehensive, life cycle services offered by HDR to identify, quantify, track and manage the risks of CCR. By focusing on your company’s own footprint you can establish priorities, set measurable goals, and take action. Evaluating Immediate Risks and Needs Short-term focus in the aftermath of the Kingston event has been on surveying the structural stability of existing impoundments and disposal facilities to assess the risk of failure. Impoundments and disposal facilities can fail in multiple ways, driven by physical characteristics and load conditions. A structural stability assessment typically begins by developing an understanding of risk factors, including the configuration and history of facility development and identification of potential failure modes. This data is used to develop an assessment of expected structural response. A stability assessment typically includes: 1) Gathering all pertinent information to understand all components of and the history of the impoundment/facility; 2) Developing a general geologic, geotechnical, hydrologic, and hydraulic characterization of the site; 3) Estimating engineering properties (index properties, density, strength, permeability) of ash, embankment and foundation materials; 4) Developing seepage and stability models of critical sections of an impoundment; 5) Evaluating seepage and stability for the full range of loading conditions; and 6) Calibrating modeling results with observed conditions and known behavior of the impoundment. Additional issues that may bear investigation include the need for an overall water balance of the impoundments/ facilities and the associated potential risk of leaching, leachate and water quality impacts. Such issues may call for leachate and groundwater analysis, the potential for leachate to affect groundwater quality, and potential measures to reduce leachate effects on groundwater. Once immediate risks have been evaluated, potential courses of action can be identified and examined. Utilities may wish to implement short-term stability/structural enhancement measures while tracking the course of regulatory development. They may need to address immediate water quality issues from leaching, leachate management or other potential discharges to groundwater or surface water. Other options include evaluating potential issues related to closing or decommissioning facilities, evaluating potential sites for replacement facilities or relocating coal combustion residuals, including engineering characteristics and potential costs and evaluating reuse options. Without a risk ranking the options can lead to a daunting decision-making process. In a changing regulatory environment, each of these alternatives has its own set of risks as well as related costs and benefits that should be considered. These risks can be influenced via the strategies listed below.

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Stability/Structural Enhancement Once the overall safety of an impoundment/facility has been assessed, the results can be compared to standards based criteria with estimates of risk developed in terms of annual probability of failure and related consequences. This can help determine the need for either or both short- (interim) or long-term corrective actions. Short (interim) corrective actions are typically aimed at stabilizing emerging conditions to prevent a failure, and/or to provide sufficient time to evaluate and implement long term corrective actions. Short term enhancements may include modified operations, surface water diversions, dewatering, installation of stability berms or filters/drains, unloading by removal of materials from critical areas, etc. Long term corrective actions are typically more robust versions of short term enhancements based on a detailed engineering and operational assessments. They may also include incorporation of technologies such as in situ strengthening of weak materials, installation of cutoff walls or seepage barriers, anchored retaining walls, etc. The requirements for each site should be tailored to the identified critical failure modes. Water Quality Mitigation, Leachate Treatment and Management Water quality mitigation, leachate treatment and management require a comprehensive approach. The specific nature of CCR leachate/wastewater varies based on characteristics of the source coal, co-fired materials and the specific process or technology utilized. The route of exposure, along with the physical and chemical characteristics of the receiving water/aquifer, affects fate and transport and interaction within the biological community. The mobilization and fate of potential CCR pollutants in groundwater is controlled by complex geochemical and biological processes that vary temporally and spatially. Geochemical modeling is an important component of fate and transport modeling. Leaching tests and modeling should be used to simulate geochemical conditions throughout the post closure care period. Waste characteristics and the volume of water available to flow through the waste, along with the specific chemistry of the waste—particularly pH—influence leachate quality and the mobilization of CCR-derived metals. Evaluation of proximity to sensitive environmental receptors should include the following: •

Environmental and ecological risk assessment;

•

Remedial technologies may include geochemical-based approaches;

•

Post closure care, including long term water quality and environmental monitoring;

•

Leachate treatment is site specific with options ranging from settling ponds to advanced treatment options.

Closure/Decommissioning There are many technical and environmental issues regarding the closure and/or decommissioning of ash ponds. First, a determination of whether the material will have to be removed and disposed of elsewhere is necessary, including identifying whether it can be recycled in part or entirety. If removal is not required or desired, an approved closure plan and/or cap must be negotiated with the appropriate regulatory agencies, including plans for environmental monitoring and future use. Environmental impacts must be evaluated and assessed, and a remediation plan developed, including assessing the need for long-term monitoring.

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Siting for New or Replacement Facilities Siting is a critical step in planning any ash management facility. Steps to ensure success include estimating the capacity and the area needed, and determining regulatory and permitting requirements. Planners should also establish siting criteria that includes areas to avoid risk areas such as: wetlands, karst or other unfavorable geology, protected species and habitats, floodplains, etc. Criteria should include desirable characteristics that minimize future problems, mitigation or cost. A GIS database of potential siting areas can be of great help in identifying and assessing siting characteristics, other natural resource characteristics, major utilities, roads and other pertinent data. A “risk register” can be used to ensure that categories of risks are not overlooked. After siting criteria are determined, they can be applied to the study area(s) to identify parcels of land of sufficient size that meet the criteria and address public involvement objectives to inform and secure buy-in from the public. Established siting criteria help determine constraints as well as desirable characteristics. Choices can be narrowed to potential desirable sites, and the team will conduct an environmental review. When a preferred site is selected from the short list of candidates, property acquisition (if needed) and permitting will be initiated to mitigate identified risks. Reuse Options Coal combustion residuals is the generic term used to refer to several very distinct materials produced when coal is combusted to produce electricity. These materials include fly ash, bottom ash and scrubber residuals. Bottom ash, the heavier particles that remain after combustion, is similar in form and composition to fine aggregates like sand and gravel. Bottom ash also can be used to produce concrete blocks, shingles and asphalt. Scrubber residuals consist of either calcium sulfate (gypsum) or calcium sulfite. There are several beneficial use options for gypsum by-product, including use as a component in concrete mixes and soil additives. The manufacture of gypsum wallboard provides the maximum reuse of gypsum by-products and already includes 30 percent of U.S.-produced wallboard products, reducing the need to mine gypsum. Some states allow the daily use of combined ash or bottom ash materials for landfill daily cover as a substitute for soil cover materials. This reduces costs for landfill operations and conserves the use of on- and off-site borrow sources. Reuse options can mitigate and even avoid some risks, but as the proposed EPA rules evolve, there is a potential that beneficial use markets may reject materials that could be (but are not yet) classified as hazardous waste. Future risk assessments and their related business cases can help in developing the best case of action for your operation. Conceptual/Preliminary Engineering and Cost Estimates for Retrofitted, New or Relocated Facilities New regulations are expected to drive the need for operating coal plants to retrofit their existing ash handling and disposal systems. This may include retrofits and operational system changes or even the design and construction of new, off-site Subtitle D compliant disposal facilities. The first steps in retrofitting a facility are to study options, select an approach and define the operating basis for retrofit installation. A design basis document should be developed that incorporates reliability, redundancy, cost risk and value engineering and other plant

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operations and maintenance considerations. Other key steps include preparing a conceptual plant arrangement and flow diagram and establishing tie-in points and/or boundaries for the retrofit installation. Developing a risk-based budget for installation, a project milestone riskbased schedule and construction plan are essential to the success of a retrofit project. Permitting Depending on the content of the final, approved regulatory changes, it may be necessary for existing ash disposal permits to be amended or new facilities permitted. Permits are often the largest, least predictable, and most difficult to control risk in a project. Permit amendments may require plans and specifications for proposed modifications and operational descriptions to demonstrate compliance with applicable requirements. New facility permitting typically includes obtaining local siting approval and defining site characteristics, including geology, soils and groundwater flow. It also includes developing site plans, construction details, construction quality assurance, monitoring, operational descriptions, and closure and post-closure care to demonstrate compliance with the regulations. Financial assurance elements must be included to ensure the facility owner/operator has the means to close the facility and provide care through the prescribed post-closure period. Operational Implications

Complex on-site facility retrofits may be required to accomplish CCR handling system modifications. The retrofit challenge is further complicated by the need to maintain plant operations on multiple units with shared CCR handling facilities. Operational risks are often neglected in risk assessment. Often changing processes that have a large human component are more risky than large capital intensive engineered solutions. Potential ash handling, storage, disposal, and hauling system changes that would impact plant operations include: •

Wet to dry conversions that typically require new dry conveyance systems, storage silo, controls and building, and dry truck/rail/barge load out facilities. Transporting dry ash to off-site disposal or beneficial use facilities will create the potential for spill risks during transport.

•

Lining of on-site bottom ash, and/or fly ash ponds and addition of leachate collection and/or monitoring systems. These may include pond modifications while maintaining plant operations, potential impacts on waste water discharge systems or plan water reuse systems.

•

Potential conversion of bottom ash wet slurry systems to drag chain systems that may require eliminating slurry piping and adding bottom ash load out and disposal transport.

•

Dewatering system additions that encompass potential elimination of ponds and changes to ash load out, handling and disposal of dewatered ash. Wastewater discharge systems or water reuse systems may also be impacted.

•

Potential changes to flue gas desulfurization slurry, dewatering, gypsum systems. Beneficial re-use of gypsum has implications for landfill disposal systems, depending on plant location and the gypsum market.

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Risk Assessment and Management Utility managers face daily challenges to respond to immediate risk-related concerns without over-stepping or under-addressing emerging regulatory requirements. Technical and operational “fixes” must be understood in light of shifting regulatory, safety and reputational risks and should address both operational and financial perspectives. Risk analysis provides a way to understand the results of actions beyond a single expected outcome by measuring the probability that a series of potential outcomes may materialize. This is accomplished by attaching ranges (probability distributions) to forecasts for a variety of scenarios. The approach recognizes interrelationships between variables and their associated probability distributions. All of the risk factors, although described above as separate and distinct risks, are inter-connected. The diagram below outlines a typical risk management analysis for a CCR management program based on the following steps: 1. Identify - Identification of the structure and logic, risk flowchart, and possible risk factors of the project; 2. Quantify - Assign estimates and ranges (probability distributions) to each variable and forecasting coefficient in the forecasting structure and logic; 3. Mitigate – Assign and manage risks. Updating, quantification and re-evaluation of risks as needed. 4. Track – Ongoing communication of risk analysis results.

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Risk analysis is particularly relevant when dealing with costs that could result from damage to the environment. When such damage (or the potential for damage) occurs, it has often been overlooked in prior cost-benefit decisions that tend to overlook or minimize the potential for negative outcomes. Risk analysis addresses uncertainty through a careful assessment of the nature and degree of risk, providing estimate boundaries and risk ranges; that confirm the analytical approach and data inputs with subject matter experts and stakeholders, simulating variables for each alternative outcome.

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Tracking and managing risks is crucial. HDR has utility industry experience to address CCR risk and develop a path forward based on a sound understanding of the potential for various outcomes and costs to facilitate reasoned business decisions. Summary reports like the one shown below can be generated to communicate results:

ABC Utility CCR Risk Management

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A system can be set up to automatically communicate changes to the project manager, team, or senior management. Utility management will have the benefit of a detailed examination of alternatives including probability of outcomes along with related costs and benefits. Management will be equipped to formulate or shift strategies as requirements emerge. Management can use this information to explain the business merits of their risk mitigation or adaptation plans in monetary terms to regulators, shareholders, customers and other stakeholders. Regulatory Tracking and Analysis Industry organizations are closely tracking the development of new CCR regulatory requirements. The solid waste industry went through a comparable process in the 1990s when EPA developed new requirements for municipal waste combustor ash handling and disposal. At that time, EPA was considering whether to regulate under Subtitle C or Subtitle D. In the end EPA settled on requiring testing of any ash streams which left the main boiler building, using the TCLP test. If it passed it was regulated as Subtitle D waste; if it didn’t it was subject to Subtitle C requirements. The same types of regulatory issues are now being considered for coal combustion residuals. Regulatory tracking and analysis is crucial in a CCR risk tracking system so that new risks, and changing regulatory requirements and social obligations can be monitored, quantified and addressed. As a seasoned solid waste industry consultant, HDR understands the waste-related component of this process. As a full-service engineering and consulting firm, we bring the combination of expertise—energy, waste and water resources, including levee and dam expertise—to provide you with the most comprehensive services available in the industry today.

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HDR’s Coal Combustion Residuals Management Team: Stability/Structural Enhancement

Ron Grady Vice President

[email protected]

John Dempsey Vice President [email protected] Keith Ferguson Vice President [email protected] Alex Grenoble Vice President [email protected] Water Quality Mitigation, Leachate Treatment and Management

Brad Stone Vice President

[email protected]

John Locklear Sr. Project Manager [email protected] Lyle Christensen Sr. Project Manager [email protected] Kanishka Perera Project Manager [email protected] Mark Roberts Vice President [email protected] John Dempsey Vice President [email protected] Closure/Decommissioning

Richard Coles Vice President [email protected] Sam Barnes Vice President [email protected]

Comprehensive Coal Combustion Residue Risk Management Tom Wos Vice President [email protected] Richard Roe Sr. Project Manager [email protected] John Dempsey Vice President [email protected] Michael Oden Project Manager [email protected] Siting for New or Replacement Facilities

Mark Wollschlager

Sr. Vice President [email protected]

John Dempsey Vice President [email protected] Brad Stone

Vice President [email protected]

Michael Oden Project Manager [email protected] Reuse Options

Bob Rella Sr. Vice President [email protected] Sam Barnes Vice President [email protected] Tom Wos Vice President [email protected] Richard Roe Sr. Project Manager [email protected] Conceptual/Preliminary Engineering for Retrofitted, New or Relocated Facilities

Ron Grady Vice President [email protected] Sam Barnes

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Comprehensive Coal Combustion Residue Risk Management Vice President [email protected] Tom Wos Vice President [email protected] Richard Roe Sr. Project Manager [email protected] John Dempsey Vice President [email protected] Michael Oden Project Manager [email protected] Permitting

Lori Calub Solid Waste Project Engineer [email protected] John Dempsey Vice President [email protected] Joe Readling Vice President Joe [email protected] Operational Implications

Tom Wos Vice President [email protected]

Richard Roe Sr. Project Manager [email protected] Sam Barnes Vice President [email protected] Steve Poteet Sr. Project Manager [email protected] John Dempsey Vice President [email protected] Michael Oden Project Manager

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Comprehensive Coal Combustion Residue Risk Management [email protected] Risk Assessment and Management

John Parker Vice President [email protected]

Keith Ferguson Vice President [email protected]

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