Coal Redevelopment

Before embarking on the redevelopment process, it is crucial to understand who owns what on the site. Utility companies that generated power may own the site, but not necessarily. Hedge funds may now own it; commercial salvage firms or redevelopment firms may have bought it; and pieces of the land may be controlled by external entities, like railroads and other transportation modalities that have rights of way or easements. Typically, the community process will be working with experts to get to the bottom of what can be a highly technical undertaking of identifying ownership.

LINKS TO INFORMATION ON OWNERSHIP

WHAT IF THE PLANT IS STILL OPEN?

Some decommissioned coal plants may have sat vacant for 30 years and are ripe for redevelopment. In the four states of Central Appalachia, 88 utility sites are not operating; 21 are on stand by, and the remainder are not expected to operate in the coming year. Any of them may be a target for redevelopment.

Others are facing transition. Conversations about transition must start as early as possible with current owners, stakeholders, the redevelopment team, and the community planning committee.

DO YOU HAVE A ZOMBIE POWER PLANT ON YOUR HANDS?

Over the last decade, there has been much discussion about “zombie” homes, residences where the homeowners just walked away, leaving behind an uncared-for house that dragged down surrounding housing values. Due to the rapid pace of coal-fired power plant closures, many people worry that these plants will become much larger and potentially much more dangerous “zombies.”

KEEP THE COMMUNITY INFORMED

As you learn about the site’s ownership —as you do in all phases of your work—you will want to keep everyone informed. 

Case Studies:

A coal power plant site is a brownfield.  What is a brownfield?  The USEPA states: A brownfield is a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. It is estimated that there are more than 450,000 brownfields in the U.S. Cleaning up and reinvesting in these properties increases local tax bases, facilitates job growth, utilizes existing infrastructure, takes development pressures off of undeveloped, open land, and both improves and protects the environment.

U.S. ENVIRONMENTAL PROTECTION AGENCY LINKS:

A brownfield may contain many types of pollutants, from toxins in coal ash ponds or landfills to asbestos in buildings left standing on site.  Any unused coal and hazardous materials associated with both the generation process, the coal ash left after burning (which is not classified as a hazardous waste but contains toxic substances)  and the buildings/structures (e.g. process chemicals, asbestos in the building or in equipment, polychlorinated biphenyls [PCBs], lead) must be assessed and remediated or removed prior to redevelopment.

The need to remediate coal ash ponds and landfills is both pressing and costly.  It can pose a barrier to redevelopment of shuttered coal power plants, leaving valuable land and infrastructure vacant and blighted. The Earth Justice and the  Environmental Integrity Project has documented coal ash pollution affecting groundwater at 91% of 265 power plants across the country. Pollution will require remediation before other investors are willing to take title, and remediation can be costly: For example, cleanup at the Alabama Power sites was estimated at $3.3 billion in 2019; the utility attributed the 3% increase in customer rates to coal ash clean-up. Clean-up there may take 7-12 years to close the ponds, with an additional 30 years of groundwater monitoring required after closure.

Who pays for the remediation may be a major point of negotiation in the sale or transfer of the site. While new approaches for mitigating the cost of remediation are under development, complexity and scale of remediation can make redevelopment difficult.

The challenge for redevelopment is that there are many unknowns about the state of each site. Remediation may or may not have happened to a satisfactory level, depending on ownership and phase of shut-down. The rigor of environmental remediation at any give site may not match the purposes you have in mind.  Remediation may be adequate for industrial use but not commercial, retail or housing.  The type of remediation that has been done may determine redevelopment options. It is possible that  remediation has not occurred at all.

The community will care about pollutants on the site and will want and need all the information available. A major focus of community interest may be the remediation of pollutants affecting groundwater, cancer levels and other health concerns emerging in the community. Redevelopment will be hampered if community members feel remediation is not going to address lingering health concerns. The community must understand the cost and timeline for clean-up and redevelopment.

The task of remediation may have been undertaken when a community becomes involved, or it may remain to be addressed.  Many actors can be involved.

Brownfield site remediation – particularly of a site as big as coal power plant site – can be a huge task, involving billions of dollars and years of work. The Environmental Law Institute outlines all the private and public sector organizations may play a role in the course of cleaning up and redeveloping brownfield sites. Not all of these organizations will be involved at every site. Key players include –

Property owners or developers that decide to clean up brownfield sites, either for sale or reuse, may perform the cleanup under the oversight of a state environmental agency. In addition to overseeing cleanups, state environmental agencies may offer incentives such as liability protection from further cleanup.

Some states provide economic incentives, such as low-interest loans, for the redevelopment of brownfield properties. These incentives may be offered through state economic development and planning offices that are interested in attracting new businesses and investors to their states, as well as guiding their state’s growth.

An increasing number of commercial lenders are willing to provide loans to support the cleanup and redevelopment of brownfields.

Technical consultants can help design and implement the investigation and cleanup of environmental contamination on brownfields. Technical consultants may also help property owners or developers work with state regulatory agencies and communities surrounding the property.

Lawyers can assist in many aspects of the cleanup, redevelopment, and sale of brownfields by advising all interested parties, from owners and developers to neighbors and community members, about regulatory requirements, negotiating with regulators and prospective buyers, drafting sales agreements, and communicating with the other people interested in the project.

State and federal cleanup programs may require public involvement such as opportunity for notice and comment from the public. Furthermore, some economic incentives, such as grants and loans, may not be available unless supported by the surrounding community. Even when not required, support for the project from communities surrounding brownfields may be needed for it to be successful over the long term.

Local economic development, planning and tax agencies may provide incentives for brownfield redevelopments in order to attract investors and businesses to their communities, guide growth, and increase jobs. Local health agencies may have an interest in ensuring that contaminants on brownfield properties do not pose a threat to community health.

EPA is unlikely to be directly involved in the cleanup of brownfield properties, because most cleanups will be overseen by the states. EPA provides cleanup and redevelopment incentives and financial support, however, that may be available for some brownfields projects.

Developers typically manage the entire process of cleaning up and adapting properties for new uses, but they may limit their involvement to determining and implementing marketable reuses of brownfields.

A new group of firms specializing in cleaning up and reusing brownfields has emerged in recent years. These firms rely on a mix of engineering, legal and real estate technical and financial backing and expertise.

Real estate professionals can provide advice on the market for a particular property and can help locate buyers or developers.

CDCs, nonprofit organizations created to encourage local urban redevelopment, can assist in determining the value of a property, redeveloping a site, and marketing a site.

Federal government agencies, other than EPA, may provide technical and financial support for brownfield redevelopment including the Department of Housing and Urban Development, the United States Army Corps of Engineers, the Commerce Department’s Economic Development Administration, and the Department of Interior’s Groundworks USA Program.

An environmental consultant is essential to this phase of work. There are federal EPA funds available to help with the cost of the environmental consultant. See Chapter 6 – Financial and Technical Assistance 

There are federal EPA funds available to help with the cost of remediation, but the owner – utility or the last owner in the chain of title related to the pollution –  is not eligible for federal EPA funding under many programs. 

A redevelopment corporation, a public entity like a port authority, or a new owner may be eligible for accessing EPA grants and loans. the utility or hedge fonds or others who own it may not be eligible for such aid – in other words, as long as ownership remains in the hands of an entity  who is in the “chain of title” during which pollution occurred, federal funds are likely not available.  

Public subsidies for clean-up are complex. There are technical assistance centers to help communities understand the process.

Environmental remediation of shuttered coal plants should have/may have occurred during the decommissioning stage; what the community must do is obtain the environmental assessments (phase I, II and III) and understand the type of remediation already in place.

These site assessments are critical in establishing the required course of actions that must be taken to remediate environmental concerns.

Although the extent of the cleanup will depend on the final land use, many common methods are applied. For example:

Remediation of coal combustion residuals, commonly known as coal ash, is critical in coal plant redevelopment. This is one of the largest industrial waste streams in the nation. It has often been  disposed of in onsite landfills or surface impoundments, known as coal ash ponds.

Some shuttered coal utility plants will still have onsite coal ash ponds or solid waste landfills. It is important to understand the nature and extent of the on-site contamination that may exist, pollutants that may have drifted into adjoining properties, and penetration of pollutants and toxins into surface and groundwater. There is no shortage of horror stories associated with the dangers of coal ash.

Typically the community will work closely with an industrial realtor and/or an environmental consultant or engineer on the initial phases of understanding the physical characteristics of the site. Experts will be called in as needed to move the process forward. Experts in understanding site characteristics include:

This is a very complicated phase of redevelopment.  Getting started can be hard.  There are sources of technical assistance to help communities understand the process.

Redevelopment of a power plant site will be overseen by many levels of government and regulatory agencies.  The timeline will encompass regulatory approvals.