MEMORANDUM OF AGREEMENT FOR THE REGULATION OF COAL COMBUSTION RESIDUALS AT THE CHESAPEAKE ENERGY CENTER

Transcription

1 MEMORANDUM OF AGREEMENT FOR THE REGULATION OF COAL COMBUSTION RESIDUALS AT THE CHESAPEAKE ENERGY CENTER J HIS MEMORANDUM OF AGREEMENT ("Agreement") is made and entered into this \~ of November, 2018 (the "Effective Date"), by and among Virginia Electric and Power Company d/b/a Dominion Energy Virginia ("Dominion Energy"), and the Virginia Department of Environmental Quality ("DEQ") ( each a "Party" and collectively the "Parties"), related to the regulation ofcoal Combustion Residuals at the Chesapeake Energy Center. RECITALS WHEREAS, Dominion Energy's Chesapeake Energy Center ("CEC") is located in the City of Chesapeake, Virginia, in the Chesapeake Bay watershed, on a peninsula surrounded by the Southern Branch of the Elizabeth River ("SBER") on the eastern side, Deep Creek on the southern side, and a former cooling water discharge channel on the western side along the western bank ofthe SBER; WHEREAS, the CEC opened in 1953 and operated four coal-fired electric generation units that were retired in 2014, at which time the CEC ceased producing coal combustion residuals ("CCR"), as defined in 40 C.F.R and 9 Va. Admin. Code (C); WHEREAS, for decades Dominion Energy routed CCR from its generating units to an area ofthe CEC designated for disposal ("Historic Pond"); WHEREAS, in 1970, Dominion Energy sold an approximately 24-acre tract ofland comprising the northern portion ofthe Historic Pond to a third party, which in turn developed and constructed a Liquefied Natural Gas facility on that property and which facility continues to operate; WHEREAS, in 1984, the predecessor to the DEQ issued Dominion Energy a solid waste permit ("Permit 440") to construct and operate a lined landfill ("Landfill") for CCR disposal within the footprint of the Historic Pond at the CEC; WHEREAS, in 1985, Dominion Energy, in constructing the Landfill, stabilized and placed a synthetic liner over the portion ofthe Historic Pond at the CEC that underlies the Landfill; WHEREAS, concurrent with construction ofthe Landfill, a Bottom Ash Pond I and Sedimentation Pond were created in a separate area adjacent to the Landfill and also within the footprint ofthe Historic Pond at the CEC; 1 "Bottom Ash Pond" means the bottom ash pond referred to in AECOM, SENATE BILL 1398 RESPONSE, TECHNICAL MEMORANDUM 6 at 3-1 (Nov. 2017). -1

2 WHEREAS, the Bottom Ash Pond received sluiced bottom ash (a type of CCR) from the plant until December 2014, and some ofthat bottom ash was periodically excavated and hauled to the Landfill for disposal or marketed for beneficial reuse; WHEREAS, in 1993, the DEQ issued an amendment to Permit 440 allowing vertical expansion ofthe Landfill; WHEREAS, CCR ceased being placed in the Landfill prior to October 19, 2015; WHEREAS, the Landfill is an approximately 22-acre industrial landfill that currently contains approximately 975,000 cubic yards of CCR; WHEREAS, the Landfill is slated for closure in accordance with the Virginia Solid Waste Management Regulations ("VSWMR"), 9 Va. Admin. Code et seq.; WHEREAS, in June 2016, the DEQ issued to Dominion Energy a draft solid waste permit for closure ofthe Landfill, which was later suspended at Dominion Energy's request; WHEREAS, although the DEQ has historically regulated the Bottom Ash Pond under its VPDES program and the Landfill under the VSWMR, the DEQ does not directly regulate the Historic Pond as a separate solid waste management unit or wastewater treatment pond; WHEREAS, for purposes ofdetermining compliance with applicable groundwater protection standards, Permit 440 has required and continues to require monitoring of groundwater around the perimeter ofthe area comprising the Historic Pond at the CEC; WHEREAS, in 2002, a corrective action component was incorporated into Permit 440 based on the results of groundwater monitoring, and a remedy ofmonitored natural attenuation was approved in 2011; WHEREAS, in response to two large coal ash spills in other states, the U.S. Environmental Protection Agency ("EPA") developed regulations for coal ash storage and strengthened existing controls to ensure the long-term safety and structural integrity of existing ash ponds to prevent future releases, issuing its final rule on April 17, 2015 ("CCR Rule"); WHEREAS, the DEQ incorporated the CCR Rule into its VSWMR on January 27, 2016; WHEREAS, the Bottom Ash Pond is an "inactive CCR surface impoundment" as defined in the CCR Rule, 40 C.F.R , and the VSWMR, 9 Va. Admin. Code (C), and is slated for closure; WHEREAS, a question has arisen between the DEQ and Dominion Energy as to applicability ofcertain portions ofthe CCR Rule and VSWMR to the Historic Pond at the CEC; -2

3 WHEREAS, the Parties nonetheless agree that the area comprising the Bottom Ash Pond, the Landfill, and the Historic Pond at the CEC will require ongoing groundwater monitoring, corrective action, closure and post-closure care under the jurisdiction ofthe DEQ; WHEREAS, the Parties also agree that under the CCR Rule and VSWMR, a full range of remedial alternatives - from total CCR removal for recycling or off-site disposal to monitored natural attenuation - will need to be considered; WHEREAS, it is in the best interests of the Parties to resolve, by agreement, the uncertainty as to which regulatory requirements should apply to the Historic Pond at the CEC so as to avoid the risks, costs and burdens of litigation to resolve this uncertainty as well as promote administrative efficiency; and WHEREAS, the Parties desire to enter into this Agreement regarding the regulatory requirements related to groundwater monitoring, corrective action, closure, and post-closure care to be applied to the Historic Pond at the CEC in the solid waste permit action governing closure ofthe Landfill and Bottom Ash Pond. NOW THEREFORE, in consideration ofthe foregoing and ofthe mutual covenants hereinafter set forth, the Parties agree as follows: AGREEMENT 1. Solid Waste Regulation and Permitting at the CEC. The Parties agree that certain requirements ofthe CCR Rule and VSWMR that will apply, prospectively, to the Bottom Ash Pond shall properly extend and apply to the area comprising the Historic Pond at the CEC [see Exhibit A] for purposes of achieving compliance with applicable groundwater protection standards as well as certain closure and post-closure care criteria. Specifically, the Parties agree that the following regulatory provisions, as they become applicable to the Bottom Ash Pond after the Effective Date, shall apply equally to the area comprising the Historic Pond at the CEC and as such requirements are incorporated into the solid waste permit action governing closure of the Landfill and Bottom Ash Pond: a. Groundwater monitoring and corrective action as required by 40 C.F.R to as well as the applicable portions ofthe Virginia Solid Waste Management Regulations, 9 Va. Admin. Code to -820; b. Closure and post-closure care as required by 40 C.F.R and as well as the applicable portions of the Virginia Solid Waste Management Regulations, 9 Va. Admin. Code to -820; and c. Recordkeeping, notification, and posting information on the Internet, related to the requirements in the provisions in (a) and (b), as required by 40 C.F.R (a)-(d), (h)-(i), (a)-(d), (h)-(i), and (a)-(d), (h)-(i) as well as the applicable portions ofthe Virginia Solid Waste Management Regulations, 9 Va. Admin. Code to For the purpose ofclarification, nothing in this Agreement is intended to classify the Historic -3

4 Pond as an "inactive CCR surface impoundment" as that term is defined in the CCR Rule, 40 C.F.R , and VSWMR, 9 Va. Admin. Code (C). 2. Mutual Covenants Not to Sue. a. The DEQ covenants not to take administrative or judicial action against Dominion Energy related to (1) applicability ofor compliance with the CCR Rule or VSWMR with respect to the Historic Pond arising prior to the Effective Date, and (2) applicability ofor compliance with the CCR Rule or VSWMR with respect to the Historic Pond arising after the Effective Date except as provided in paragraph 1. b. Dominion Energy covenants not to challenge either administratively orjudicially the imposition of applicable provisions ofthe CCR Rule and VSWMR as provided in paragraph 1 in the solid waste permit action governing closure of the Landfill and Bottom Ash Pond. 3. No Waiver. Neither the DEQ nor Dominion Energy otherwise waives any procedural or substantive rights, claims, or defenses related to any administrative process or other legal action. 4. Third-Party Beneficiaries. The Parties acknowledge and agree that this Agreement does not create any rights or benefits in any third-party, and does not create any independent right ofaction for any third-party, including the right to enforce this Agreement. 5. Successors and Assigns. The provisions ofthis Agreement shall be binding on the Parties and their successors and assigns, and shall inure to the benefit ofthe Parties and their successors and assigns. 6. Entire Agreement. This Agreement memorializes and constitutes the entire agreement and understanding among the Parties with respect to the subject matter ofthis Agreement. 7. Governing Law. This Agreement shall be governed by and construed under the laws ofthe Commonwealth ofvirginia without regard for the conflict oflaw provisions thereof. 8. Authority and Validity. Each Party represents, warrants and acknowledges, as ofthe Effective Date that: a. it has the requisite authority to execute and deliver this Agreement; b. such Party' s execution and delivery ofthis Agreement have been duly authorized by all necessary action, and no other action or proceeding is necessary to authorize and approve this Agreement; -4

5 c. this Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding agreement by it, enforceable against it; and d. the execution and delivery by such Party ofthis Agreement does not and shall not violate any provision of law, rule, or regulation otherwise applicable to it. 9. No Reliance. Each Party represents and warrants that in entering into this Agreement it is relying on its own judgment, belief and knowledge and, as applicable, on that of any attorney it has retained to represent it in this matter. In entering into this Agreement, no Party is relying on any representation or statement made by any other Party or any person representing such other Party. 10. Modification or Amendment. This Agreement may be modified or amended only by written agreement executed by each of the Parties. 11. Termination. This Agreement shall terminate once a final solid waste permit has been issued in accordance with paragraph 1 and all avenues for judicial review ofthe issuance of the permit have been exhausted, including the running of any appeal period. 12. Construction. This Agreement has been drafted through a cooperative effort of all Parties, and none ofthe Parties shall be considered the drafter ofthis Agreement so as to give rise to any presumption ofconvention regarding construction of this document. This Agreement was negotiated at arms' length, and was prepared and executed without fraud, duress, undue influence, or coercion ofany kind exerted by any of the Parties upon the other. 13. Headings. Titles and headings in this Agreement are inserted for convenience of reference only and are not intended to affect the interpretation or construction of this Agreement. 14. Execution in Counterpart. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all ofwhich together shall constitute one and the same instrument. All signatures ofthe Parties to this Agreement may be transmitted by facsimile or by electronic mail, and such transmission will, for all purposes, be deemed to be the original signature ofsuch Party whose signature it reproduces and will be binding upon such Party. 15. Severability. Ifany provision ofthis Agreement is determined to be prohibited or unenforceable, then such provision shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. (Remainder ofpage Intentionally Blank; Signatures to Follow) -5

6 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set forth above. VIRGINIA ELECTRIC AND POWER COMP ANY D/B/ A DOMINION ENERGY VIRGINIA VIRGINIA DEPARTMENT OF ENVIRONMENTAL QUALITY JJJ41i!3. NM By: Mark D. Mitchell Its: Vice President - Generation Construction By: Matthew J. Strickler Secretary ofnatural Resources

7 Exhibit A- Historic Pond at Chesapeake Energy Cente:r ' - VEPCO.. Yacht Drive De".'lopment LLC,.,' D Legend - Waste Management Boundary <ii Property Boundary cj Parcels ' Topographic Contour Line A:COM Dale: January Prepared By: RJP Scale: 1" = 1,000' AECOM 4840 Cox Road Glen Allen. Virginia Job Number Reviewed By: KAH Fil e Name: Attachment II - Property Attachment II Chesapeake Energy Center Property Map Industrial Landfill Corrective Action Status Evaluation Chesapeake, VA Solid Waste Permit No. 440