U.S. Environmental Protection Agency officials will propose a new deadline of Aug. 31, 2020, to initiate closure of all unlined surface impoundments managing coal ash and impoundments near aquifers or impacting groundwater on Nov. 4, an EPA official told S&P Global Market Intelligence on a Nov. 1 conference call.

The Trump administration previously set a deadline of Oct. 31, 2020, to initiate the closures. However, a cloud of uncertainty hung over the power generating sector as the EPA worked to address court orders requiring changes to federal coal ash management requirements.

"The reality is that the majority of surface impoundments and many landfills are going to be going through the closure process," said EPA's Office of Land and Emergency Management's Assistant Administrator Peter Wright. "I think we're implementing the program in a way that is protective of public health and the environment but also is reasonable in light of the continuing need for some facilities to generate power from the standpoint of reliability as well as being supportive of measures to support the beneficial reuse of coal ash."

The 2015 Coal Combustion Residuals, or CCR rule, initially set the deadline to initiate the closure of coal ash storage not in compliance with the rule within six months. In July 2018, the Trump administration extended the deadline of the costly rule through October 2020.

Earlier this year, an internal watchdog report found that the EPA avoided $25.9 million in incremental costs by giving utilities more time to shut down coal ash storage sites.

Citing public health and environmental concerns in August 2018, however, the D.C. Circuit struck down a provision that allowed unlined ponds to continue to operate unless a leak was detected and remanded the rule to the EPA for changes.

Over 500 power generating units at approximately 260 facilities may be impacted by the new rule, according to the EPA. A February analysis found that roughly 250 out of 400 coal ash ponds subject to the 2015 rule were required to begin closure efforts. A March report from environmental group Earthjustice found that 91% of the 265 coal plants where data was analyzed leaked unsafe levels of coal ash constituents into underlying groundwater.

The 2016 Water Infrastructure Improvements for the Nation, or WIIN, Act, gave states the authority to operate regulatory programs for coal ash management. Last year, the EPA approved Oklahoma's coal ash program and recently proposed the approval of Georgia's program.

The agency has been in discussions with roughly 20 states containing approximately 70% of U.S. surface impoundments about taking steps to take over the authority to regulate coal ash, according to the EPA. Wright said a majority of impacted units are likely to come under state regulation. He said that all states with ten or more affected power units seem interested in taking on a coal ash regulatory program, which would have to be at least as stringent as the federal rules.

The full text of the rule was not made available ahead of its planned release. However, the EPA said it aims to address matters raised in litigation, legislation, petitions for reconsideration and rule implementation. It will include a provision allowing a 90-day extension of the deadline and also provides for deadline extensions in certain circumstances such as an impending coal plant closure.

Under provisions of the 2015 coal ash rule, all units managing coal ash are still required to monitor groundwater, publicly report the data and take action to address exceedances of its groundwater protection standards.

New research from Avner Vengosh, a professor at Duke University's Nicholas School of the Environment, recently highlighted concerns around carcinogenic hexavalent chromium coming from coal ash. Citing widespread dissemination of hexavalent chromium formed when coal ash mixes with fresh water to create leachate, Vengosh said "coal ash should not in any way be placed into the environment."

The 2015 rule came in the wake of two major U.S. coal ash disasters. In 2008, a coal ash pond ruptured at Tennessee Valley Authority's Kingston plant and over a billion gallons of fly ash and water spilled into the environment. The incident damaged homes and several workers involved in cleaning up the spill later became ill. Duke Energy Corp. eventually pleaded guilty to criminal violations of clean water laws after one of its North Carolina facilities spilled coal ash into the Dan River in early 2014.

Managing coal ash is a significant liability for coal-fired power plant owners. At a recent board meeting, a TVA executive called coal ash "one of the bigger cost risks and environmental risks to TVA in the future."

Duke Energy, which operates more coal combustion residual units than any other utility in the U.S. according to a June analysis from S&P Global Market Intelligence, was recently ordered by North Carolina regulators to remove nearly 100 million tons of waste produced by six of its coal-fired power plants. The order is expected to add $4 billion to $5 billion in costs to its current $5.6 billion cost estimate for managing ash in the Carolinas.

The EPA released a rule in August to address issues associated with coal ash piles that support the "beneficial use" of the material, including the production of wallboard, concrete, highway roadbeds and for agricultural purposes.

The EPA also plans to roll out changes to effluent limitation guidelines on Nov. 4, though Wright said he was not prepared to discuss that rule further. In April, the U.S. Court of Appeals for the 5th Circuit ruled several provisions of that rule illegally relied on outdated technology.