STATE OF INDIANA

COUNTY OF MARION

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BEFORE THE INDIANA DEPARTMENT
OF ENVIRONMENTAL MANAGEMENT

 

COMMISSIONER OF THE DEPARTMENT
OF ENVIRONMENTAL MANAGEMENT,

Complainant,

v.

DUKE ENERGY INDIANA, LLC,
CAYUGA STATION,

 

Respondent.

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Case No.
2018-25152-W

 

AGREED ORDER

Complainant and Respondent desire to settle and compromise this action without hearing or adjudication of any issue of fact or law, and consent to the entry of the following Findings of Fact and Order. Pursuant to Indiana Code (IC) 13-30-3-3, entry into the terms of this Agreed Order does not constitute an admission of any violation contained herein. Respondent's entry into this Agreed Order shall not constitute a waiver of any defense, legal or equitable, which Respondent may have in any future administrative or judicial proceeding, except a proceeding to enforce this order.

 

I. FINDINGS OF FACT

1.             Complainant is the Commissioner (Complainant) of the Indiana Department of Environmental Management (IDEM), a department of the State of Indiana created by IC 13-13-1-1.

 

2.             Duke Energy Indiana, LLC (Respondent) owns and operates the property where the Cayuga Generating Station (Cayuga Station or Station) is located at 3300 North SR 63, in Cayuga, Vermillion County, Indiana (the Site).

3.        Respondent self-reported facts regarding potential violations of Indiana’s environmental statutes and regulations.

4.        Respondent is authorized by National Pollutant Discharge Elimination System (NPDES) Permit Number IN0002763 (the Permit) to discharge wastewater in accordance with the terms and conditions of the Permit via Outfall 001, Outfall 002, Outfall 003 into the Wabash River and through Outfall 004 into an unnamed tributary of the Wabash River.

5.        Respondent submitted a renewal application (the Application) for the Permit on August 25, 2017. Respondent filed a timely Application; therefore, the Permit was considered administratively extended in accordance with 327 Indiana Administrative Code (IAC) 5-2-6(b).

6.        IDEM has jurisdiction over the parties and the subject matter of this action pursuant to IC 13-30-3.

7.        Respondent waives issuance of a Notice of Violation and to the settlement period of sixty (60) days as provided for by IC 13-30-3-3.

 

8.             Respondent’s Cayuga Station is a coal-fired, two-unit electric generating station that has been owned and operated by Duke Energy or its predecessor companies from the 1970s to the present.

 

9.             As part of the Station’s normal operations over the years, it used various former and current ash surface impoundments (primary and secondary type impoundments) to manage various coal combustion residuals (“CCR”) waste streams. These ash surface impoundment operations were conducted in accordance with applicable laws and regulations at the time. Indeed, the discharges from the process water system have been subject to NPDES permit requirements.

 

10.         Over the course of time; however, some of the groundwater at Cayuga Station has become impacted by CCR-related constituents from the surface impoundment system.

 

11.         There are 22 “non-engineered” seeps at Cayuga Station. These seeps were not designed or constructed to be, and do not act as, toe drains for any surface impoundment. Likewise, these seeps were not designed or constructed to address any ash impoundment berm stability issues. Rather, these seeps consist of locations where at times existing groundwater naturally daylights (and therefore creates some surface flow) as the ground surface slopes toward the Wabash River at Cayuga Station. In addition to the 22 seeps, there is one seep that has recently been discovered to be contacting the liner of the Station’s new wastewater treatment finishing impoundment, so the Station began directing the water from this seep into the finishing impoundment.

 

12.         Previous sampling of some of these seeps indicate the presence of some CCR-related constituents at levels above what would be naturally occurring. Therefore, it is apparent that these seeps include some groundwater that has been impacted by CCR-related constituents from the surface impoundment system as noted above.

 

13.         In the Station’s 2013 NPDES permit, the above-referenced seeps were not treated as point source discharge outfalls. However, monitoring for a number of parameters was required and conducted at three of the representative seeps for compliance purposes. The Station submitted sampling data to IDEM for each of those representative seeps.

 

14.         The flows from the seeps are highly dependent on various conditions such as groundwater levels, changes in groundwater recharge rates, the operational level of the surface impoundments, high precipitation events, drought conditions, and whether the seep areas are under water due to seasonal flooding. Limited seep flow data exists. However, based on the information that is available, the approximate combined flow for Seeps 1-7 is 1.2 MGD; for Seeps 8-12 is 0.85 MGD, for Seeps 13-19 is 0.60 MGD, and for seep 20 is 0.0075 MGD.

 

15.         Seeps 1-7 flow to the Outfall 001 drainage canal downstream of the Outfall 001 sampling point. Seeps 8-12 flow to the Wabash River between Outfall 001 and 002. Seeps 13-19 flow to the Outfall 002 drainage canal downstream of the Outfall 002 sampling point. Seep 20 is directed to the final finishing impoundment, which in turn, discharges through Outfall 002 to the Wabash River.[1]

 

16.         Due, in part, to the number, configuration, location, and hydraulics of the seeps, IDEM has determined that it would be impractical and infeasible to regulate the seeps at Cayuga Station as NPDES outfalls.  IDEM has determined that the seeps will be removed from the Station’s NPDES permit and will instead be addressed by this Agreed Order. Based on the above, IDEM has decided that using an enforcement action (i.e. this Agreed Order) to address the seeps at Cayuga Station is the preferable approach.

 

17.         IDEM has found the following violations regarding the seeps:

 

18.      Pursuant to IC 13-30-2-1(1), a person may not discharge, emit, cause, allow, or threaten to discharge, emit, cause, or allow any contaminant or waste, including any noxious odor either alone or in combination with contaminants from other sources, into the environment in any form that causes or would cause pollution that violates or would violate rules, standards, or discharge or emission requirements adopted by the appropriate board under the environmental management laws.

 

Pursuant to 327 IAC 2-1-6(a)(1), all surface waters at all times and at all places, including the mixing zone, shall meet the minimum conditions of being free from substances, materials, floating debris, oil, or scum attributable to municipal, industrial, agricultural, and other land use practices, or other discharges that do any of the following:

 

(A)      will settle to form putrescent or otherwise objectionable deposits;

 

(B)      are in amounts sufficient to be unsightly or deleterious;

 

(C)      produce color, visible oil sheen, odor, or other conditions in such degree as to create a nuisance;

 

(D)      are in concentrations or combinations that will cause or contribute to the growth of aquatic plants or algae to such degree as to create a nuisance, be unsightly, or otherwise impair the designated uses; and

 

(E)      are in amounts sufficient to be acutely toxic to, or to otherwise severely injure or kill aquatic life, other animals, plants, or humans.

 

As identified in the Application, IDEM has found that Respondent allowed 23 seeps to discharge, either directly or indirectly, into the Wabash River, a water of the State, in violation of IC 13-30-2-1 and portions of 327 IAC 2-1-6(a)(1).

 

19.      Respondent is already conducting actions, such as the closure of Ash Disposal Area #1, that are expected to improve the groundwater quality (and therefore the constituent levels in the seeps).

 

20.      In addition, Respondent has ceased operation and is initiating the closure of the other surface impoundments at the Station pursuant to the CCR Rule’s requirements set forth in 40 C.F.R 257 as incorporated into Indiana law. These actions are further expected to improve the groundwater quality and therefore lower the constituent concentrations in the seeps.

 

21.      In recognition of the settlement reached, Respondent waives any right to administrative and judicial review of this Agreed Order.

II. ORDER

1.             This Agreed Order shall be effective (Effective Date) when it is adopted by Complainant or Complainant’s delegate (as evidenced by signature), and the adopted Agreed Order has been received by Respondent. This Agreed Order shall have no force or effect until the Effective Date.

2.             Within ninety (90) days of the Effective Date, Respondent shall develop and submit to IDEM for review and approval a Compliance Plan (“CP”) which identifies actions that Respondent is in the process of taking, and proposes to take, to: (a) annually survey, identify, and report the existence of all seeps at the Station; (b) monitor the flow and constituent concentrations for representative seeps; (c) reduce the CCR-related constituent concentrations for the Station’s groundwater that has been impacted by the Station’s former and current surface impoundments so as to adequately protect public health, safety and welfare; (d) reduce the concentrations of CCR-related constituents in the seeps so as to adequately protect public health, safety and welfare; and (e) demonstrate that the seeps are not causing any unacceptable risks to public health, safety and the environment with respect to their total suspended solids, pH, and oil and grease.

 

The CP shall include an implementation and completion schedule, including specific milestone dates.

 

3.             Any newly identified seeps from the Station’s annual survey and report shall be covered by and subject to the terms of this Agreed Order while it is in effect.

 

4.             In the event that Respondent determines a milestone date in the CP cannot be achieved, Respondent shall within sixty (60) days of making that determination, develop and submit to IDEM, for approval, an Additional Action Plan which identifies the additional actions that Respondent will take to achieve and maintain compliance. The Additional Action Plan, if required, shall include an implementation and completion schedule, including specific milestone dates.

 

5.             Respondent, upon receipt of written notification from IDEM, shall immediately implement the approved CP and adhere to the milestone dates therein. The approved CP and Additional Action Plan shall be incorporated into this Agreed Order and shall be deemed an enforceable part thereof.

 

6.             Respondent shall within ninety (90) days following receipt of IDEM’s written notification of approval of the CP and every ninety (90) days thereafter until completion, submit to IDEM a quarterly progress report detailing activity toward completion of each milestone included in the CP or Additional Action Plan.

 

7.             In the event IDEM determines that any plan submitted by Respondent is deficient or otherwise unacceptable, Respondent shall revise and resubmit the plan to IDEM in accordance with IDEM’s notice. After three (3) submissions of such plan by Respondent, IDEM may modify and approve any such plan and Respondent must implement the plan as modified by IDEM if necessary to satisfy the requirements in Order Paragraph #2. The approved plan shall be incorporated into this Agreed Order and shall be deemed an enforceable part thereof.

 

8.             All submittals required by this Agreed Order, unless Respondent is notified otherwise in writing by IDEM, shall be sent to:

 

Linda McClure, Enforcement Case Manager

Office of Water Quality – IGCN 1255

Indiana Department of Environmental Management

100 North Senate Avenue

Indianapolis, IN 46204-2251

 

As to Respondent:

 

 

Julie L. Ezell, Esq.

Duke Energy Legal Department

1000 East Main Street

Plainfield, IN 46188

(317) 838-1100

julie.ezell@duke-energy.com

 

9.             Respondent is assessed and agrees to pay a civil penalty of Thirteen Thousand Five Hundred Dollars ($13,500). Said penalty amount shall be due and payable to the Environmental Management Special Fund within 30 days of the Effective Date; the 30th day being a “Due Date.

 

10.         As long as the Station remains in compliance with the terms of this Agreed Order, Complainant shall not assess civil penalties for any newly identified seeps.

 

11.         In the event the terms and conditions of the preceding paragraphs are violated, IDEM may assess and Respondent shall pay the corresponding stipulated penalty:

 

Paragraph

Violation

Penalty Amount

2, 7

Failure to submit or modify the CP, as required, within the given time period.

$250 per each week late

4, 7

Failure to submit or modify the Additional Action Plan, if required, within the given time period.

$250 per each week late

5

Failure to meet any milestone date set forth in the approved CP or Additional Action Plan.

$500 per each week late

6

Failure to submit quarterly progress reports.

$250 per each week late

 

12.         Stipulated penalties shall be due and payable no later than the 30th day after Respondent receives written notice that IDEM has determined a stipulated penalty is due, the 30th day being a “Due Date.” IDEM may notify Respondent at any time that a stipulated penalty is due. Failure to notify Respondent in writing in a timely manner of a stipulated penalty assessment shall not waive IDEM’s right to collect such stipulated penalty or preclude IDEM from seeking additional relief against Respondent for violation of this Agreed Order. Neither assessment nor payment of stipulated penalties shall preclude IDEM from seeking additional relief against Respondent for a violation of this Agreed Order. Such additional relief includes any remedies or sanctions available pursuant to Indiana law, including, but not limited to, civil penalties pursuant to IC 13-30-4.

 

13.         Civil and stipulated penalties are payable by check to the “Environmental Management Special Fund.” Checks shall include the Case Number 2018-25152-W of this action and shall be mailed to:

 

Office of Legal Counsel

Indiana Department of Environmental Management

IGCN, Rm N1307

100 North Senate Avenue

Indianapolis, IN 46204

 

14.      Force majeure, for purposes of this Agreed Order, is defined as any event arising from causes totally beyond the control and without fault of Respondent that delays or prevents the performance of any obligation under this Agreed Order despite Respondent’s best efforts to fulfill the obligation. The requirement that Respondent exercise “best efforts to fulfill the obligation” includes using best efforts to anticipate any potential force majeure event and best efforts to address the effects of any potential force majeure event: (1) as it is occurring; and (2) following the potential force majeure event, such that the delay is minimized to the greatest extent possible. Force majeure does not include: (1) changed business or economic conditions; (2) financial inability to complete the work required by this Agreed Order; or (3) increases in costs to perform the work.

 

Respondent shall notify IDEM by calling the case manager within three (3) calendar days and by writing no later than seven (7) calendar days after it has knowledge of any event which Respondent contends is a force majeure. Such notification shall describe: (1) the anticipated length of the delay; (2) the cause or causes of the delay; (3) the measures taken or to be taken by Respondent to minimize the delay; and (4) the timetable by which these measures will be implemented. Respondent shall include with any notice all available documentation supporting its claim that the delay was attributable to a force majeure. Failure to comply with the above requirements shall preclude Respondent from asserting any claim of force majeure for that event. Respondent shall have the burden of demonstrating that the event is a force majeure. The decision of whether an event is a force majeure shall be made by IDEM.

If a delay is attributable to a force majeure, IDEM shall extend, in writing, the time period for performance under this Agreed Order, by the amount of time that is directly attributable to the event constituting the force majeure.

15.      This Agreed Order shall apply to and be binding upon Respondent and its successors and assigns. Respondent’s signatories to this Agreed Order certify that they are fully authorized to execute this Agreed Order and legally bind the party they represent. No change in ownership, corporate, or partnership status of Respondent shall in any way alter its status or responsibilities under this Agreed Order.

 

16.      In the event that the monies due to IDEM pursuant to this Agreed Order are not paid on or before their Due Date, Respondent shall pay interest on the unpaid balance and any accrued interest at the rate established by IC 24-4.6-1. The interest shall be computed as having accrued from the Due Date until the date that Respondent pays any unpaid balance. The interest shall continue to accrue on the first of each month until the civil penalty and any interest accrued are paid in full. Such interest shall be payable to the “Environmental Management Special Fund,” and shall be payable to IDEM in the manner specified above.

 

17.      In the event that any terms of this Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if this Agreed Order did not contain the invalid terms.

 

18.      Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent owners or successors before ownership rights are transferred. Respondent shall ensure that all contractors, firms and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

 

19.      This Agreed Order is not and shall not be interpreted to be a permit or a modification of an existing permit. This Agreed Order, and IDEM’s review or approval of any submittal made by Respondent pursuant to this Agreed Order, shall not in any way relieve Respondent of its obligation to comply with the requirements of its applicable permit or any applicable Federal or State law or regulation.

 

20.      Complainant does not, by its approval of this Agreed Order, warrant or aver in any manner that Respondent’s compliance with any aspect of this Agreed Order will result in compliance with the provisions of any permit, order, or any applicable Federal or State law or regulation. Additionally, IDEM or anyone acting on its behalf shall not be held liable for any costs or penalties Respondent may incur as a result of Respondent’s efforts to comply with this Agreed Order.

 

21.      Nothing in this Agreed Order shall prevent or limit IDEM’s rights to obtain penalties or injunctive relief under any applicable Federal or State law or regulation, except that IDEM may not, and hereby waives its right to, seek additional civil penalties for the same violations specified in this Order.

 

22.      Nothing in this Agreed Order shall prevent IDEM, or anyone acting on its behalf, from communicating with the United States Environmental Protection Agency (EPA) or any other agency or entity about any matters relating to this enforcement action. IDEM, or anyone acting on its behalf, shall not be held liable for any costs or penalties Respondent may incur as a result of such communications with EPA or any other agency or entity.

 

23.      This Agreed Order shall remain in effect until Respondent has complied with all terms and conditions of this Agreed Order and IDEM issues a Resolution of Case (close out) letter to Respondent.

 

TECHNICAL RECOMMENDATION:

RESPONDENT:

Department of Environmental Management

Duke Energy Indiana, LLC, Cayuga Station

 

By:__________________________

By:________________________

Samantha K. Groce, Chief

 

Water Enforcement Section

 

Surface Water, Operations &

Printed:_____________________

Enforcement Branch

 

Office of Water Quality

Title:_______________________

 

 

Date:________________________

Date:_______________________

 

 

COUNSEL FOR RESPONDENT:

 

 

 

By:________________________

 

 

 

Date:______________________

 

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL

MANAGEMENT THIS ___________ DAY OF ________________, 20___.

 

 

For The Commissioner:

 

 

Signed on July 11, 2018

 

Martha Clark Mettler

 

Assistant Commissioner

 

Office of Water Quality

 



[1] Three of the seeps have been split for identification purposes into two seeps each.  Seep 3 became Seep 3A and 3B; Seep 5 became Seep 5A and 5B; and Seep 10 became Seep 10A and 10B.  This results in a total of 23 seeps as referenced above.