Letter from Bryan Brice_20170315

F. BRYAN BRICE, JR.
CATHERINE CRALLE JONES
MATTHEw D. QUINN
WARREN KUHN HICKS
Roma R. GELBLUM, OF COUNSEL
LAW OFFICES OF
F. BRYAN BRICE, JR.
March 15, 2017
Michael S. Regan
Secretary
North Carolina Department of Environmental Quality
1611 Mail Service Center
Raleigh, NC 27699
127 W. HARGETT ST., STE. 600
RALEIGH, NC 27601
TEL: [phone]
FAX: [phone]
W W W.ATFYBRYANBRICE.COM
Re: Coal Ash Management Act — Water Supply Plan — Filtration is Not a Community
Permanent Water Supply
Dear Secretary Regan,
Congratulations on your recent appointment. I am so sorry that I was out of town and not able to
attend the recent meeting with you and your staff. I am glad that my colleague Cathy Cralle
Jones was able to be there and share with you particular issues regarding Duke Energy's
permanent water supply plans for the communities surrounding coal ash impoundments at the
Belews Creek, Roxboro and Mayo steam plants, located in Stokes and Person Counties. Our
issues involve the interpretation and implementation of the Coal Ash Management Act (CAMA)
and our desire to meet jointly with DEQ and Duke to resolve these issues in a way that provides
and acceptable outcome for our clients, a positive economic future for these communities and
property owners, and finality and certainty for both DEQ and Duke in the closure plans for these
impoundments under the law.
We wanted to follow up to detail our clients' concerns regarding Duke Energy's plan to provide
household water filtration as the only option for neighbors at Belews Creek, Roxboro and
Mayo. In stark contrast to its plans for all other plants in the state where public water line
connection projects are soon to be underway, at these three communities Duke is offering only
one choice for these neighbors -- a future of absolute dependence on Duke for water, long tern
property devaluation, and no economic development for the area. DEQ has authority to review
the conditional approval it gave these plans and also has the authority to provide an extension of
time for completion of permanent water supply connections under CAMA.
We strongly urge the Department to revisit the water plans for these three plants and require that
Duke implement plans for the installation of public water lines to serve these areas. As set out in
more detail below, the statute does not authorize the exclusion of entire communities from
receiving public water connection. The $35,000 cost threshold is an arbitrary number proposed
by Duke, and not a reasonable threshold of what is "cost -prohibitive" in these circumstances for
a company with reported annual earnings of $8.62 billion dollars in 2016.1 These effected
I htt8://www.marketwatch.com/investine/stock/DUK/fmancials

March 15, 2017
Page 2 of 5
communities have a high percentage of low and moderate income households, and significant
minority populations. Denying a public water connection to these communities will result in
long term property devaluation and prevent economic development of these mostly historic
family lands.
Under the Coal Ash Management Act, Duke Energy is required to establish "permanent
replacement water supplies" for households with drinking water wells within % mile of from an
established compliance boundary and where coal ash constituents are expected to migrate. N.C.G.S.
§130A-309.211. The statute clearly indicates that preference is a public water connection, with very
limited exception:
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 and (ii) if the
Department determines that connection to a public water supply to a particular
household would be cost -prohibitive, the Department shall authorize provision
of a permanent replacement water supply to that household through installation
of a filtration system. For households for which filtration systems are installed, the
impoundment owner shall be responsible for periodic required maintenance of the
filtration system.
The statute only authorizes filtration systems if: 1) the homeowner makes that election; or 2) if the
Department determines that connection to a particular household would be cost prohibitive. The
statute does not contemplate that entire communities would be denied a permanent replacement water
supply.
Under Duke Energy's plan, at least 178 eligible wells (58 at Belews Creek, 91 at Roxboro, and 22 at
Mayo) would have filtration systems as the only option available. Many of these wells serve
multiple homes, churches, and group housing facilities. No new homes can be built unless the new
owner assumes the cost of long term filtration. Even then, groundwater issues will need to be
disclosed to all potential buyers and future buyers. Under the plans for these communities, "well
eligible" properties will forever be dependent on Duke and its contractors to assure proper
functioning, repair or replacement of the systems, and must allow regular intrusions to inspect the
system.
DEQ has indicated only limited approval of Duke Energy's proposed plans for these plants, but Duke
has not provided information to DEQ or to the effected communities regarding:
How quality assurance testing will be done?
o who will take water samples,
o how often,
o what lab will perform the analysis,
o how will the results be communicated to the well owner
How long service will be provided and under what conditions?

March 15, 2017
Page 3 of 5
o Will a new system be installed if a well owner chooses to build a new home using
the same well?
o Are service contracts transferable to new property owners?
Neither Duke nor DEQ has provided clear information to effected well owners regarding the
performance standards for these systems. Well owners have no information regarding whether the
proposed system will address the level of contaminants for which they received Do Not Drink letters.
The Department has offered no indication of the basis for its determination that provision of a
permanent water supply by public water connection was "cost prohibitive" for Duke Energy at
Belews, Roxboro and Mayo. Duke Energy suggested $35,000 as the cost per household threshold,
but provided no public indication of how that figure was determined or how it applied to these plants.
Duke Energy's water plan analysis is based upon a 10 year cost estimate for filtration, rather than the
cost of providing a permanent water supply. According to the American Water Works
Association, the general life expectancy for a public water line before corrosion creates a need for
replacement is 70 years, but many systems plan for pipes to last 100 years? Filtration systems are
not designed to be permanent and will require regular maintenance and periodic replacement.
Enclosed is side by side cost comparison for these three plants and the Buck and Allen plants based
on the cost estimate contained in Duke Energy's water supply plans submitted in December of 2016.'
Assuming a 50 year period of operation, with no escalation of service or installation costs over time,
the 50 year cost of filter system installation and maintenance is more than $150,000/household.
Duke's own estimate of its one-time cost for a permanent pubic water connection for these plants
would be equal to or less than its cost for only 50 years of filtration, ranging from
$150,000/household at Mayo to $61,000/household for a community well system at Roxboro. Over
a 50 year period, under the filtration plan for these three plants, Duke will spend more than
$25,650,000 in filter installation and O&M costs. By comparison, installation of a public water
supply for these communities would cost Duke only $16,982,000 ---almost $6 million LESS, and
would provide a final, complete, and truly a permanent water supply resolution for neighbors of
these plants. If Duke plans to pass these costs onto its rate payers, including their neighbors at these
three plants, then these neighbors deserve that these costs be invested in long-term infrastructure, not
interim stop -gap fixes.
A filtration only water supply plan ensures that groundwater will continue to be drawn away from the
ash impoundments and toward residential supply wells, and further complicates clean up options for
groundwater impacts surrounding the plants.
' "The Epidemic of Corrosion, Part 1: Examining Pipe Life." American Water Works Association, December 2011.
' Our clients raise concerns about the costs estimate provided by Duke -- particularly regarding whether the
proximity of existing public water connection has been accurately reported. We have not confirmed the accuracy of
these estimates but use them for illustration purposes only to compare long-term costs of public water versus
filtration systems.

March 15, 2017
Page 4 of 5
The filtration option for these plants may have been driven as much by the October 2018 deadline
under CAMA as the comparative costs. However, an extension of that deadline to October 2019 is
clearly within DEQs discretion under the law. Consistent with Duke's goal to treat effected well
owners at each of the plants in the same manner, we believe DEQ is well within it authority under
CAMA and applicable environmental regulations to required Duke to provide municipal water to
these communities as well.
Public water lines would also ensure the possibility of future community growth — which will be lost
with a filtration only plan. Based on these plans, Duke Energy is planning to spend more than $5
million to provide a 10 year water supply to the 171 eligible wells at these three plants. In contrast,
they will spend $6 million to connect 189 wells at Buck, but that $6 million will be a long-term
investment for that community. Furthermore, because Roxboro, Mayo, and Belews Creek are in
areas likely to meet the HUD Low and Moderate income (LMI) threshold, Community Development
Block Grants administered through DEQ could be available to supplement water connections to
households outside the %2 mile designated areas and potentially drive down the current cost per
household estimates, effectively multiplying any initial Duke investment in, a permanent water line
connection.
Our office delivered to you last week petitions from the Roxboro community members asking to
be given a public water connection option and asking to meet with you and other representative
of government to further consider these issues. Similar petitions are circulating and will be
delivered soon from Belews, Mayo and other communities. We so appreciate your time and
attention to this matter. These citizens are looking to the Department to help ensure their future
with clean, safe water.
Please reconsider and reject the filtration only plans offered by Duke and direct that Duke
provide a municipal or related water service to these communities and property owners as they
are doing for everyone else around the State. All of our clients who live in these affected
communities deserve a public water supply as reference in LAMA, instead of the filtration only
option currently being offered. Do not hesitate to call with any questions or concerns. We look
forward to discussing this with you and your staff.
%Very truly yours,
F. ryan Brice, Jr.
Enclosure: Water Plan Comparison
cc: Bill Lane
John Nicholson
Sheila Holman
Jay Zimmerman

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