Analysis - The Institute for Southern Studies

As displayed below in Exhibit 5B-2, EPA was able to collect cost data on three of the most significant and recent release cases (i.e., cases
resulting in the most gallons released):
Exhibit 5B-2
Cleanup Costs for Three Recent Environmental Releases Involving CCR Impoundments
Item Owner company name
Coal-fired electric utility
Plant name & location
Impoundment
release year
Release volume
(gallons)
EPA-assigned cost
for this RIA*
1 PPL Generation LLC PPL Martins Creek Power Station PA 2005 100 million $37 million
(“Ash basin 4”)
2 Tennessee Valley Authority (TVA) Kingston TN
2008 1.1 billion
$3.0 billion
(“Dredge cell dike”)
(5.4 million cubic yards)
3 Tennessee Valley Authority (TVA) Widows Creek Power Station TN 2009 6.1 million $9.2 million
(“Gypsum stack”)
Column totals = 1.2061 billion $3.0462 billion
* Data sources:
Item 1: Page 29 of “Public Health Issues Surrounding Coal as an Energy Source,” Brian Schwartz, MD, MS, Department of Environmental Health Sciences, February
2009 at http://www.jhsph.edu/bin/g/f/Coal_and_public_health_Mar_2009.pdf
Item 2: $3.0 billion is EPA’s initial “social cost” estimate assigned in this RIA to the December 2008 TVA Kingston TN impoundment release event. Social cost
represents the opportunity costs incurred by society, not just the monetary costs for cleanup. OMB's 2003 "Circular A-4: Regulatory Analysis" (page 18) instructs
Federal agencies to estimate "opportunity costs" for purpose of valuing benefits and costs in RIAs. This $3.0 billion social cost estimate is larger than TVA’s $933
million to $1.2 billion cleanup cost estimate (i.e., TVA’s estimate as of 03 Feb 2010), because EPA’s social cost estimate consists of three other social cost elements
in addition to TVA’s cleanup cost estimate: (a) TVA cleanup cost, (b) response, oversight and ancillary costs associated with local, state, and other Federal agencies,
(c) ecological damages, and (d) local (community) socio-economic damages. Appendix Q to this RIA provides EPA's documentation and calculation of these four
cost elements, which total $3.0 billion in social cost. Appendix Q to this RIA also provides an alternative, lower estimate of social costs, based on different
modeling assumptions for capturing such costs. This alternative analysis suggests that TVA’s cleanup costs alone may be close to the social costs associated with the
Kingston impoundment failure. EPA specifically requests comment on this social cost estimate, and will continue to develop this estimate for the final rule.
Item 3: 25 January 2010 e-mail entitled “TVA Widow’s Creek Clean Up Info” from Anda Ray, Sr. Vice President of TVA Environment & Technology and TVA
Sustainablity Officer, to Jim Kohler, EPA-ORCR Environmental Engineer.
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