Appendix B_20170421

WALLACE and GRAHAM, F.A.
ATTORNEYS AT LAW
MONA LISA WALLACE t
525 NORTH MAIN STREET
WILLIAM M. GRAHAM tf
SALISBURY, NORTH CAROLINA 28144
MICHAEL B. PROSS •
1-800-849-5291
EDWARD L. PAVLEY'
www.wallacegraham.com
JOHN S. HUGHES, IV
WHITNEY V. WALLACE
MARK P.DOBY
R. DANIEL WALLACE
W. MARLOWE RARY, II
KRYSTAL C. DRAUGHN
TIFFANY N. MACK
W. BENJAMIN TOBEY
February 22, 2017
VIA U.S. MAIL
Secretary Michael Regan
North Carolina Department of Environmental Quality
1601 Mail Service Center
Raleigh, North Carolina 27699-1601
RE: Water Supply Election
Dear Secretary Regan:
TELEPHONE: [phone]
FACSIMILE: [phone]
t Also licensed in PA, SC and TX
tt Also licensed in TX
Also licensed in MD and NY
•• Also licensed in KY and WV
RECEIVED
Office of the Secretary
e°ES ;017
Department of Environment
and No j�Lscurces
Congratulations on your recent appointment. Our collective law firms represent
approximately 534 households affected by Duke Energy's ("Duke") coal ash ponds. As you are
aware, under House Bill 630 ("HB630"), Duke is obligated to provide a permanent water
solution to all households supplied by a well located within a one-half mile radius of a coal ash
impoundment boundary. Prior to your appointment, Duke and the Department of Environmental
Quality ("DEQ") had discussions regarding HB630 beginning as early as September 7, 2016. In
a letter from Harry Sideris to former DEQ Secretary Donald van der Vaart, Mr. Sideris states,
"Duke Energy and the DEQ agree that, while HB630 provides that well owners have a choice
between municipal water connection and whole home treatment..." Our firms believe this
agreement is an incorrect interpretation of the plain language of HB630 and one that clearly
favors Duke.
HB630 does not provide rights specifically to well owners. The plain language of the
legislation states, "(cl) Provision of Permanent Water Supply. — As soon as practicable, but no
later than October 15, 2018, the owner of a coal combustion residuals surface impoundment shall
establish permanent replacement water supplies for (i) each household that has a drinking
water supply well located within a one-half mile radius from the established compliance
boundary of a coal combustion residuals impoundment..." Further, the bill states, "Preference
shall be given to permanent replacement water supplies by connection to public water supplies;
provided that (i) a household may elect to receive a filtration system in lieu of a connection to
public water supplies..."

Aqua America, Inc. ("Aqua"), in the Belmont area around Allen Steam Station ("Plant
Allen"), provides an excellent example of this issue. In Belmont, Aqua owns and operates three
community wells within the one-half mile radius of Plant Allen. The three communities served
by Aqua are: Heather Glen, Highland on the Point, and Southpoint Landing. There are
approximately 77 households that receive their water supply through these wells. In each
instance, the water supply well for these households are within the one-half mile radius
established under the law. Thus, these communities qualify for a permanent water supply under
HB630 based on the plain language of the statute. An Aqua letter to Duke District Manager,
Martha Thompson, confirms that as early as November 17, 2016, Duke had agreed to include the
Aqua community wells in its permanent water solution. Establishing that, the remaining issue is
which person or entity is entitled to make the water supply election, municipal or filtration or
opt -out, for these households.
As stated above, the legislation does not provide rights specifically to well owners. It
provides rights to households that have a drinking water supply well within a one-half mile
radius from the coal ash impoundment boundary. First, Aqua is not a household. Second, the
statutory language does not limit the legislation to only those households that have a drinking
water supply well on their property. Lastly, the legislation does not allow one property owner to
make the decision for another property owner, on the basis that both share the same drinking
water supply well. This is a clear and unreasonable intrusion into the property rights of our
clients. Therefore, the legislation does not allow Aqua, the well owner, to make the choice for
the households who are property owners.
Although this example applies to our clients served by Aqua, it is not the only example of
this interpretation impacting our clients. Our clients desire hookups to municipal water systems
because they are the most permanent clean water source available to them. DEQ's agreement
with Duke does not correctly interpret the law and violates the property rights of our clients.
HB630 gives DEQ the ability to execute the statute and DEQ has left open the possibility of
changes in how the bill is executed. DEQ must require Duke Energy to comply with the law and
allow each affected household to make the rightful decision for his or her property.
We would be more than happy to discuss this and other issues with you at your earliest
convenience.
Sincerely,
WALLACE & GRAHAM, P.A.
Mona Lisa Wallace
BARON & BUDD, P.C.
Law Offices of F. Bryan Brice, Jr.