KY Proposes Settlement With Coal Company Over Water Pollution

The Kentucky Department for Environmental Protection is proposing a settlement with a coal company over thousands of alleged violations of the Clean Water Act in eastern Kentucky. The deal is among the highest the state has ever levied for pollution penalties, but environmental groups say it still falls short.

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The Kentucky Energy and Environment Cabinet filed a consent agreement earlier this week with Bardstown-based coal company Nally and Hamilton to address numerous violations of the Clean Water Act. They’re proposing the violations be settled for $507,000.

This comes six months after environmental groups announced their intent to sue the company.

Coal companies are required to report how much pollution they release into waterways. Non-profit Appalachian Voices found that many of Nally and Hamilton’s monthly reports looked familiar…as if the company were copying numbers from one month and pasting them in another.

“It would be like you filing the same tax return to the IRS year after year,” Donna Lisenby of Appalachian Voices said.

This point—that Nally and Hamilton didn’t accurately report their pollution—is one of the few on which the state and Appalachian Voices agree. After a performance audit, the Department for Environmental Protection issued a violation in January telling the company that it had missed several reports, and reminding them of their obligation to report discharge.

In March, Appalachian Voices announced they intended to sue Nally and Hamilton. Two days later, the state sent notices of violation to the company. Over the following months, the state sent dozens of letters to the company, each for multiple instances of missing or falsified reports.

Lisenby says the environmental groups intended to shame state regulators into doing their job.

“Instead, what we’ve seen is the cabinet siding with the coal companies, filing appeals of our cases to block our ability to hold these coal companies accountable,” she said. “In short, what they’ve been doing is shielding the coal companies rather than working with the citizens’ groups to hold them accountable.”

The state says it found more than 4,600 violations. Appalachian Voices says that number is much higher—by their count, Nally and Hamilton broke the law 41,000 times. Department for Environmental Protection Commissioner Bruce Scott says the state has a more conservative way of calculating violations.

“If there’s a violation in day one of the month, they may assume that’s a violation for thirty days, whereas we might assume that’s a violation for that one day that’s occurred,” he said. “So how you count them is why you see such a large discrepancy in how that number comes out.”

The issue of coal companies not reporting their pollution or blatantly lying on their reports is one that’s already surfaced with coal companies ICG and Frasure Creek Mining.

Scott acknowledges that his agency didn’t pay close enough attention to those companies. With Nally and Hamilton, it took the cabinet more than three years to issue some of the violations, but Scott says they’ve stepped up their enforcement efforts.

“We have been reviewing DMRs for facilities fairly vigorously in the last year,” he said. “Again, it was true at the time a year or so ago, but it’s not true today.”

The state filed its proposed settlement with the coal company in the Office of Administrative Hearings on Tuesday, and Scott says it’s meant to get the company to correct its actions. The settlement includes various remedial measures, like requiring Nally and Hamilton to prepare and implement a corrective action plan and upgrade the laboratory it uses for water testing.

But it’s not over, yet. In a document dated July 7 granting Appalachian Voices legal status to intervene in the case, the hearing officer strongly encouraged the commonwealth and the coal company to include the environmental groups in the settlement. They didn’t. So:

“We will be weighing in on the adequacy of the consent judgment since the cabinet thumbed its nose at its own hearing officer and failed to include us in these discussions with Nally and Hamilton,” Donna Lisenby said.

A hearing officer still has to approve the proposed agreement.