Tennessee: Costs mount for Kingston ash cleanup

Tennessee: Costs mount for Kingston ash cleanup

February 13th, 2009 in Local Regional News

KNOXVILLE - Cleaning up the coal ash that spilled from the Kingston Fossil Plant could cost up to $825 million and take more than a year to complete, TVA officials said Thursday.

And those millions could land on the shoulders of ratepayers, officials say.

At a board meeting Thursday, TVA President Tom Kilgore said the agency already has spent $31 million clearing roads and rail lines and buying 20 properties damaged when an ash retention pond ruptured three days before Christmas.

But Mr. Kilgore said the agency will have to spend far more over the next couple of years to clean up and restore nearly 300 acres covered with ash from the worst spill ever from a coal power plant.

In its first comprehensive cost estimate released Thursday, TVA estimates it will spend from $525 million to $825 million to clean up the Kingston ash spill. Such costs don't include litigation expenses, fines or any settlements from the accident or the extra cost of upgrading coal ash ponds at other TVA plants.

Mr. Kilgore said there are still "a number of things we don't know yet," but he pledged to "clean this up and make it right."

TVA Chairman Bill Sansom said "the board's position is clear" that "we will not accept anything short of complete success."

But that "success" may have to be paid for by TVA ratepayers already faced with the prospect of higher rates to pay for other TVA pollution controls and recent investment losses.

TVA Director Dennis Bottorff said ratepayers could bear much of the cost of the ash cleanup and removal costs, although the immediate costs could be offset by insurance coverage, TVA reserves and borrowing to stretch the expenses out over many years.

"These costs are going to put tremendous pressure on TVA," Mr. Bottorff said. "We want to fully explore all options to mitigate the impact on ratepayers."

If absorbed entirely in a single year, the extra costs from the ash cleanup could push up TVA rates by about 8 percent. TVA announced Thursday it lost $305 million in the fiscal quarter ending Dec. 31 due to a $525 million charge the utility took for the estimated cost of the Kingston ash spill.

The Tennessee Valley Authority is a self-financed federal corporation, and an attempt last month by U.S. Rep. Zach Wamp, R-Tenn., to get federal aid for the ash cleanup fell short.

WORRIES PERSIST

TVA spokesman John Moulton said the agency already has agreed to pay $5.9 million to buy 20 damaged properties around the spill. TVA still is negotiating with other land owners to settle other claims, he said.

But other residents in the area worry that the ash-filled Emory River might back up and flood their homes.

Barbara Majors of Kingston called TVA's warning about flooding from the spill "kind of terrifying."

"What is this ash going to do to our town?" she asked the board at Thursday's meeting.

David Reister, chairman of the Knoxville Group of the Sierra Club who owns land on the Emory, said he was "shocked that TVA had a non-sustainable approach to ash storage and ignored warning signs that the dam could break."

"I expect a federal non-profit agency to do a better job of protecting the environment than a profit-making corporation," he said.

Mr. Kilgore said TVA has hired independent contractors to investigate the spill and its causes, and he hopes by the summer to have a report on what caused the earthen dam to breach and spill out 1.1 billion gallons of ash.

Two initial water samples showed elevated levels of arsenic in the Emory River near the plant. But Mr. Kilgore said other water samples closer to the water intakes on the Clinch River and air samples throughout the area have not shown dangerous levels of particulates or heavy metals.

TVA submitted a plan last week to the Tennessee Department of Environment and Conservation, proposing to use hydraulic dredges to pump out ash from the main river channel of the Emory. The plan also calls for TVA to continue to monitor the air and water in the area for potential health risks.

Mr. Kilgore said he hopes to begin the dredging of the main river channel this spring. He said TVA still is developing plans for how it will remove and dispose of even more ash from an inlet of the Emory and other riverfront properties.