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Table of Contents

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Environment and Energy

DUKE AIR PERMIT: A federal appeals court has struck down the Bush administration's rule on controlling mercury, potentially jeopardizing an air quality permit issued to Duke Energy for its Cliffside plant expansion. The U.S. Court of Appeals for the District of Columbia overturned 2005 federal rules that removed power plants from sources whose toxic emissions, including mercury, are most tightly regulated. The rules also set the first national limit on mercury emissions, but allowed industries to trade "credits" to achieve compliance. The Environmental Protection Agency will have two years to develop "maximum achievable" mercury-control standards for power plants, said John Suttles of the Southern Environmental Law Center in Chapel Hill. New plants, he said, will be forced to undergo individual analyses -- a step North Carolina did not require for Cliffside -- and install the most effective mercury-removal technology.

The N.C. Division of Air Quality said the decision should not affect a permit to expand the Cliffside plant. The permit was based on a state mercury rule, the agency says, not the federal version thrown out. "Our initial observation is we think the permit is OK. We're not telling them to stop construction or anything," said Division of Air Quality spokesman Tom Mather. Duke also doesn't expect the ruling to affect construction at Cliffside, said spokesman Rick Rhodes. But environmental groups disagreed, insisting the state will have to reopen the permit and reevaluate the technology Cliffside uses to control the toxic element. The Catawba Riverkeeper group, joined by six other N.C. riverkeepers, said it had already decided to appeal the Cliffside permit in a state administrative court. The appeal will focus on the plant's mercury emissions. "This is icing on the cake," Riverkeeper Donna Lisenby said of the national court ruling. "We already felt like we had a good case because no mercury-specific controls were required at Cliffside." (Bruce Henderson, THE CHARLOTTE OBSERVER, 2/09/08)

ASH BASINS: Duke Energy's seven coal-fired plants in the Carolinas disgorge 2.2 million tons of ash per year. Two-thirds of that is dumped in landfills and ponds at the plants, an old practice that has begun to worry regulators. Coal ash is loaded with metals that can contaminate groundwater and lakes. State records show that arsenic, boron and selenium have been found at potentially unsafe levels in groundwater under Duke's ash basins. Duke says there is no evidence that water supplies have been harmed, and tests at some locations support that claim. The Environmental Protection Agency first raised questions about the practice in 2000, acknowledging "gaps" in oversight of ash basins. EPA is soliciting public comment to find "practical and safe solutions" for monitoring ash, an agency spokesman said.

As part of an industry response, Duke is voluntarily installing wells to detect tainted groundwater at its Carolinas plants. Fifty monitoring wells have been installed since 2005 and 33 will be added by 2010. "It's better to know," said Duke scientist Allen Stowe, "than to not know." But critics say the industry efforts, and recent N.C. legislation, don't safeguard public health after decades of ash dumping. They note groundwater contamination at Duke's biggest coal plant, Belews Creek, has been persistent enough to force Duke to close an ash landfill this year. Critics also point out that Duke's 14 unlined ash basins are the type the EPA has determined are most likely to pollute groundwater.

Last year, lawmakers approved a measure allowing new ash landfills to be built on top of old basins. The new landfills must be lined to prevent leaks and keep out rain, which can leach metals into the ground from old ash. But critics say the industry-supported measure doesn't make utilities determine the extent of contamination from the old basins. Tainted groundwater may move over time, potentially reaching offsite wells. "They're forgetting a huge step there," said attorney Lisa Evans of Earthjustice, a non-profit law firm in Oakland, Calif. "That seems like a way for the utilities to sweep under the rug any problems they might have with old surface impoundments." (Bruce Henderson, THE CHARLOTTE OBSERVER, 2/17/08)

WATER SHORTAGES: State officials are working to help the 11 North Carolina communities facing the worst water shortages to identify alternative water resources. All of the communities are west of the Triad. Those towns and cities are Bessemer City, Boone, Blowing Rock, Hendersonville, Lenoir, Marshall, Monroe, Robbinsville, Tryon, Valdese and Yadkinville. State officials said some of the areas need to interconnect their water systems with other communities nearby. Others need to dig deeper intake valves or add more wells. Officials are now assisting 19 other water systems struggling with water shortages. (THE ASSOCIATED PRESS, 2/08/08)

DROUGHT CONDITIONS: The entire state remains under severe drought conditions or worse, according to the U.S. Drought Monitor. The report released Thursday does not account for rain that fell across the state on Tuesday and Wednesday. The weekly report was no different from the drought map released last Thursday. Officials said more than 49 percent of the state faces exceptional drought conditions -- the most intense category. Those conditions extend across the middle of the state, from Rocky Mount to Asheville to Charlotte. The rest of the state is under extreme or severe drought. (THE ASSOCIATED PRESS, 2/14/08)

PENC RESPONDS TO WATER ALLOCATION STUDY: The Environmental Committee of the American Council of Engineering Companies of North Carolina (ACEC/NC) and the Professional Engineers of North Carolina (PENC) has presented a written statement regarding the Water Allocation Study commissioned by the Environmental Review Commission. The statement can be viewed in its entirety here.

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Transportation

FUND WOULD HOLD MILLIONS TO EASE TRAFFIC IN NORTH CAROLINA:

Chris Baysden
Triangle Business Journal,
Friday, February 1, 2008

State transportation planners are hashing out a proposal that would create a transit trust fund designed to generate more than $1 billion to alleviate highway congestion in urban areas of North Carolina.

The fund would be patterned after the North Carolina Highway Trust Fund, which was established in 1989 to pay for highway construction projects. The transit trust fund would underwrite mass transit systems including rail, buses and trolleys but also might be used to build greenways and bike paths. A major detail that hasn’t been worked out is where the money for the transit fund would come from. One possibility is increasing license tag fees based on the weight of a vehicle. The idea for the fund is taking shape in a subcommittee of the 21 st Century Transportation Committee.

STATE AUDIT CRITICAL OF LAGGING DOT PROJECTS:

Dan Kane and Benjamin Niolet
News & Observer
Friday, February 08, 2008

An audit of three years of state Department of Transportation projects found that many of them finished behind schedule, leading to what auditors say is an additional $152 million in inflation-related construction costs.
(link to full story here)

THIN ASPHALT: A Department of Transportation engineer warned in 2003 and 2004 that the more than 5 inches of asphalt the agency planned to use on Interstate 795 would be too thin and too weak. Now, DOT officials are weighing repairs for the highway that could cost between $1.6 million and $10 million. While officials haven't determined the extent of or a cause for the pavement failure, they have reached tentative agreement on a remedy -- thicker asphalt. The two-year-old pavement on North Carolina's newest interstate is deeply fractured in some places. Cracks and potholes began appearing just 16 months after traffic started rolling down the new four-lane freeway between I-95 at Wilson and U.S. 70 at Goldsboro. The asphalt was expected to bear cars and trucks for 15 years.

In August 2003, Wendi Johnson, a DOT engineer since 1989, wrote Clark Morrison, who heads the agency's pavement design unit in Raleigh, to warn that the division has had failures in the past with thin pavement. It would be cheaper to add sufficient pavement while the freeway was being built than to come back later for big repairs, she said. Her plea for three more inches of asphalt on I-795 would have added $2.8 million to the project's $196 million pricetag, but DOT officials said it was too expensive. They said the thinner design would suffice for a freeway projected by 2024 to carry 40,800 cars and trucks each day. Judith Corley-Lay, DOT's chief pavement engineer, said it was not yet clear whether DOT erred in its original pavement design. Some tests suggest the two top layers of asphalt on I-795 are separating from each other, a problem that might be unrelated to the overall pavement thickness. Johnson's former boss was less guarded in his assessment of the pavement failure. "It was preventable, absolutely," Jim Trogdon, who was DOT's supervising engineer for Division 4 until 2005, said in an interview.

Last year, the department spent $22.4 million to rip out a three-inch layer of almost-new concrete on I-40 in Durham County. Mistakes in design and lapses in construction oversight were blamed for a botched paving job that caused the new concrete to deteriorate. The I-40 mistakes led to the resignation of DOT's chief roadbuilder. It helped spark a $3.6 million initiative that is supposed to make DOT a more efficient, businesslike and accountable agency. (Bruce Siceloff, THE NEWS & OBSERVER, 2/09/08)

POLITICS AND ROADS : The leader of a state panel examining North Carolina's transportation needs acknowledged Tuesday that it may be impossible to fully remove politics from transportation-spending decisions. Brad Wilson, the head of the 21st Century Transportation Commission, said that politics was a natural part of government and that there was no way to remove it from the equation. But he also said that it’s important for decisions to be made in a way that is clear, open and fair. "Politics is what makes government go," said Wilson, a former state Board of Transportation member. "But it's likely we will recommend a process with transparency and criteria of how decisions are made that is communicated to the public in a clear way so everybody understands what the rules are and plays by those rules."

Wilson, chief operating officer of Blue Cross and Blue Shield of North Carolina, spoke at a forum sponsored by the Greater Winston-Salem Chamber of Commerce, transportation advocacy group N.C. Go and the N.C. League of Municipalities. The influence of politics on road building in North Carolina has come under increasing scrutiny in recent years. Leaders in Winston-Salem, Greensboro and other major cities, for example, were critical of the state's road building process last year after they learned that although many of their projects had been delayed by at least two years, a beltway around Fayetteville - the home of state Transportation Secretary Lyndo Tippett - had not been pushed back.

Winston-Salem Mayor Allen Joines, another committee member, emphasized the need to find new ways to fund road building. Joines said that rising construction costs, flat gas-tax revenues and increased demands on the state’s roads could soon create serious problems. The N.C. Department of Transportation is facing a projected shortfall of up to $65 billion during the next 20 years in transportation funding. Wilson said better public transit and smarter development could also help the situation. The committee plans to present a long-range plan by the end of the year. It also intends to present lawmakers with a set of short-term recommendations to consider during the short legislative session later this spring. (Jim Sparks, WINSTON-SALEM JOURNAL, 2/06/08)

LEADERS GIVE UPDATE ON TRANSPORTATION STUDY: It's hardly news that North Carolina's transportation system needs help, but if anything is going to change, the state has to find new ways to plan for a growing population and heavier road use. That's the message Brad Wilson, chair of the 21st Century Transportation Committee, delivered Tuesday at a breakfast sponsored by the Greater Winston-Salem Chamber of Commerce, N.C. Go! and the N.C. League of Municipalities. Wilson and others discussed how the state faces congestion and other transit problems. North Carolinia can't rely on shrinking federal dollars and must get creative to find funding, Wilson said. It's also going to require better efficiency, regional planning and development. Wilson said the committee will present to the N.C. General Assembly immediate recommendations -- such as ending the transfer of funds from the Highway Trust Fund to the general fund -- in time for the short session in May. (Friday, February 8, 2008, Business Journal of the Greater Triad Area)

ACCESS POINTS: Responding to a Wilmington jury verdict that will cost the state Department of Transportation $16 million, DOT Secretary Lyndo Tippett blames a bad land deal negotiated personally by one of his predecessors, Garland Garrett. A New Hanover County Superior Court jury last week awarded that sum to Bruce B. Cameron Jr. and his family in their dispute with DOT over construction of the Martin Luther King Jr. Parkway -- part of the U.S. 74 bypass around Wilmington. The Camerons said they gave DOT 35 acres for the parkway and DOT promised to allow access roads along the parkway to adjoining commercial property the Camerons owned. A 1995 document released Thursday by DOT spokesman Ernie Seneca shows that Cameron made the access deal with Garrett, who was transportation secretary under former Gov. Jim Hunt. Garrett later served a prison sentence for federal crimes related to an illegal video poker gambling operation.

State and local planners eventually agreed that the MLK Parkway should be built as a limited-access expressway -- without a lot of side roads, intersections and traffic signals that would slow traffic down. DOT refused to allow the access roads. The Camerons sued, saying their land wasn’t worth much after it was rendered inaccessible from the parkway. DOT made offers ranging from $2.4 million to $9 million. The Wilmington Star-News reported that the Camerons sought $22 million, although Tippett said the demand was for $30 million. A jury settled on $16 million after a one-week trial. “Under a previous administration, former Secretary Garland Garrett approved these access points over objections from DOT staff,” Tippett said Thursday. “Subsequent to this decision, DOT has closed the access points and offered a fair price to compensate the Camerons.” DOT has not decided whether to appeal the jury award. (Bruce Siceloff, THE NEWS & OBSERVER, 2/15/08)

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Other News of Interest

TAX COLLECTIONS:

THE INSIDER, 2/07/08

A weakening economy is beginning to affect tax collections, especially sales taxes, legislative economist Barry Boardman told a legislative oversight committee on Wednesday. Boardman presented figures to the Joint Legislative Commission on Governmental Operations showing that sales tax collections in the first half of the fiscal year grew by 3.9 percent -- below typical average growth of 5.8 percent. The good news for legislative budget writers -- as well as Gov. Mike Easley, who would have to address any budget shortfall -- is that current sales tax growth is still above the 2.9 percent built into budget projections.

Another good sign for the North Carolina economy and the revenue picture: Employee withholding taxes grew by 7.4 percent through December, still well above historical trends and an indication that this state is weathering an economic downturn better than many others. "We think North Carolina will fare better than other states," Boardman said. Revenue figures reported last month showed that tax collections were running about $125 million above projections. Boardman pointed out that even though about half the annual tax collections came in during the first six months of the fiscal year, the volatility of collections in the second half year is much greater.

PLUG-IN CARS: Gov. Mike Easley announced a plan last Tuesday to research and develop a battery in the state that could power a new generation of cars that pull over to plug in instead of gas up. Easley said his budget request to the legislature this year would include money for N.C. State University to launch a research project that could lead to a viable plug-in electric car. "This new energy economy is out there just waiting for somebody to pluck it from the vine," Easley said in announcing the plan at the 2008 Emerging Issues Forum at N.C. State University. "I'm going to make sure that North Carolina gets its share." The goal of N.C. State researchers at the new Advanced Transportation Energy Center would be to design a battery that charges faster, lasts longer, is more powerful and costs less. Easley dubbed the battery the "Wolf Pack Power Pack."

The system could be used in a hybrid gas-electric car, but Easley said within two to five years he wants a car that runs entirely on electricity. Duke Energy Corp. and Progress Energy Corp. said they have both pledged to participate in the project and are already developing a grid system that would allow drivers to charge their car batteries while away from home. Easley said the project could cost up to $5 million in its first year and $1 million annually afterward. The state is applying for two grants that he wouldn't disclose to help defray the cost to taxpayers. Officials believe they can develop such a battery in two to five years. Easley said leaders of the General Assembly promised him funding, if he makes a good case. (Christopher D. Kirkpatrick, THE CHARLOTTE OBSERVER; THE ASSOCIATED PRESS, 2/12/08; Jordan Schrader, ASHEVILLE CITIZEN-TIMES, 2/13/08)