Special Report: Industry wraps coal ash regulation fight in the mantle of civil rights


Standing out among the more than 250 people who testified at the recent Environmental Protection Agency hearing on proposed coal ash regulations in Charlotte, N.C. was one speaker with an especially distinguished background: Charles Steele Jr. (in photo at right), the first African-American member of the Tuscaloosa City Council and a former Democratic state senator from Alabama who went on to lead the Southern Christian Leadership Conference, the legendary civil rights organization whose first president was Rev. Martin Luther King Jr. Steele left SCLC last year and now runs a consulting firm in Atlanta.

Given Steele's work on behalf of civil rights, one might have expected him to support better regulation of coal ash -- perhaps talking about the fact that many of the U.S. communities at greatest risk from the most potentially hazardous impoundments have higher-than-average poverty rates. Or about the finding that environmental contamination from coal ash dumps is concentrated in high-poverty communities. Or about the controversial decision to dump the toxic coal ash waste from the Tennessee Valley Authority's 2008 Kingston disaster in Tennessee in an impoverished, majority-black farming community in Alabama, in a landfill where runoff now contains levels of cancer-causing arsenic at more than 80 times the safe drinking water standard.

Instead, Steele was at the Sept. 14 hearing to argue against coal ash regulation, claiming that the costs would disproportionately burden the most economically vulnerable Americans.

"What I'm concerned about is the fact that we're not talking about poor people, about affordability," said Steele, a doctor of divinity whose impassioned preaching livened up the proceedings. "We all believe in clean air and a clean environment, but somebody must pay for this. It will be put on minorities and poor people."

In an opinion piece about his EPA testimony published the following day at a conservative website, Steele lumped the proposed coal ash rules together with other energy proposals and claimed that they would "increase the poverty rate by 20 percent for African-American families and 22 percent for Hispanic families, while decreasing median minority household incomes by as much as $660 per year." He also said that the coal ash regulations would have a disproportionate impact on the Southeast.

But coal ash experts take issue with Steele's claims.

"This is a completely disingenuous argument," said Lisa Evans, a former EPA official who's now an attorney with the environmental advocacy group Earthjustice.

Evans points out that the coal ash rule-making process required the EPA to conduct a regulatory impact analysis considering the economic effects of tougher oversight -- including how much the different versions of the proposed rules would increase consumers' electricity costs. The EPA found that there wasn't much difference in cost to consumers between the stricter approach, where coal ash would be treated like a special hazardous waste with federal enforcement, and the approach favored by industry, where coal ash would not be classified as hazardous and enforcement of federal disposal guidelines left up to states and citizen lawsuits.

The government analysis also found that there wasn't much of an increase in power costs even with the more protective regulation, which would result in an average increase in electricity bills nationwide of less than 1 percent, or 0.795 percent to be exact. That would raise the average monthly home power bill for U.S. residents -- currently about $99.70, according to recent Census data [pdf] -- by about 79 cents.

And despite Steele's claims that the South would be hit especially hard, a Facing South analysis found that the increase in average power bills in Southern states* would be only negligibly higher, at just 0.8 percent. In Steele's current state of Georgia, for example, the expected 1.16 percent cost increase would raise the average monthly home power bill of $106.48 by $1.24. In Steele's former home state of Alabama, the estimated 1.43 percent price hike would increase the average monthly residential bill of $121.70 by $1.74. Even in Kentucky, where the estimated increase would be the greatest of any Southern state at 2.3 percent, the average monthly residential bill of $89.35 would increase by just $2.06.

Those are price increases, yes -- but hardly the kind that would drive families into poverty. In turn, the modest additional cost would help build a regulatory system that would better protect people living near the nation's 584 coal ash impoundments from catastrophic failures. The new rules would also help protect nearby residents from health threats, as a recent EPA risk assessment [pdf] found that people living near unlined coal ash impoundments and drinking from wells have as much as a 1 in 50 chance of getting cancer due to arsenic contamination.

So why would Steele make such exaggerated claims about the cost of coal ash regulation?


Industry connections

Steele was at the EPA coal ash hearing representing Working People for Fair Energy (WPFE), one of the numerous 501(c)(4) "social welfare" lobbying groups that have sprung up in advance of this fall's elections -- and that are not required by law to disclose where their money comes from. The website for the Atlanta-based group, which Steele incorporated last June, says its purpose is "protecting working families from national energy laws that create higher energy prices."

But a Facing South Investigation has found that WPFE has close ties to industry interests with a financial stake in fighting coal ash regulation:

* The scant information WPFE offers about itself on its website is that it's part of the Partnership for Affordable Clean Energy (PACE), another 501(c)(4) that's based in Montgomery, Ala. PACE was incorporated in February 2009 by William D. Lineberry, an attorney with the Birmingham, Ala. office of Balch & Bingham -- a firm that lobbies on behalf of the Southern Company and its Alabama Power subsidiary. Lineberry also serves on the tax committees of the Business Council of Alabama as well as Manufacture Alabama -- both of which are partners in PACE. PACE's other members include the Chamber of Commerce Association of Alabama, the Tennessee Chamber of Commerce and Industry, and the IBEW System Council U-19, which represents 3,000 Alabama Power employees and is one of the largest member unions of the state AFL-CIO, another PACE partner.

* The research cited by Steele in his account of his EPA testimony came from a group called the Affordable Power Alliance led by conservative African-American Christian minister Harry R. Jackson Jr. APA in turn is affiliated with the Congress of Racial Equality, founded in the 1940s as a civil rights organization but which in more recent years has supported anti-environmental initiatives such as expanded oil drilling while accepting money from Exxon Mobil and other corporations. "Coal and natural gas are the new civil rights battleground," CORE Chairman Roy Innis has said, "because without these sources, 'we' cannot enjoy this great society."

* When WPFE held a town hall meeting last year in Tuskegee, Ala. to discuss energy policy, joining Steele on the panel was Stephen A. Jones -- director of corporate relations for Alabama Power.

In an interview with Facing South, Steele said he didn't see a problem with WPFE's and PACE's relationship with industries that have a financial stake in fighting coal ash regulation.

"Our issues are the same," he said.

Steele's perspective is shaped by the close personal ties to energy interests forged during his decade in the Alabama senate, where he chaired the Industrial Recruitment Committee. Alabama Power -- a major player in state politics -- was one of the biggest contributors to his campaigns.

When Steele left the state senate in 2004 to head SCLC, he was taking the helm of an organization in deep trouble financially and otherwise. But Steele's connections helped turn around the SCLC's money woes. He built a new $3 million headquarters for the organization with a capital campaign headed by Mike Garrett, president and CEO of Georgia Power, "whom Steele got to know during his days in the Alabama legislature," as Ebony magazine reported.

Some of the deals Steele made between SCLC and business interests proved controversial. In 2008, for example, an op-ed bearing Steele's byline appeared in a number of Southern U.S. newspapers criticizing federal legislation to reduce credit card fees by arguing that it would boost the profits of major retailers including Wal-Mart. But it turned out Steele didn't write the editorial and was angry the P.R. firm that did put his name on it because, as the Washington Post reported, Wal-Mart "is listed on the SCLC's Web site as a sponsor of the organization. No one at the SCLC would want to insult a large benefactor."

That same year, Steele had an op-ed published in the Washington Post that noted the devastating effect the subprime mortgage crisis was having on minority homeowners. But rather than supporting proposals to better regulate credit markets, Steele attacked them -- while defending companies that issued high-interest credit cards to people with bad credit. As Mother Jones observed at the time, that's not altogether surprising when you consider that a year earlier "the SCLC formed a partnership with CompuCredit, a subprime credit card issuer and payday lending company."

The Federal Trade Commission eventually sued CompuCredit for unfair and deceptive trade practices and for violating the Fair Debt Collection Practices Act, charging that it cheated consumers out of more than $200 million through a scheme in which they paid so much in fees that they had little credit available.

But Steele defended the company even then, saying that it "has been a true friend to the SCLC."


The fight for the status quo

The utility industry could certainly use a staunch defender like Steele right now, as it has a great deal at stake in the battle over coal ash regulation.

That's especially true for the Southern Company. Generating almost 70 percent of its power by burning coal, the company produces an enormous amount of coal ash -- 12.4 billion pounds in 2008 alone, according to a recent corporate report [pdf]. It operates 11 power plants with coal ash surface impoundments in Georgia, six in Alabama, three in Florida and two in Mississippi, which means that complying with proposed federal requirements to ensure they are not leaking contamination to groundwater would be a major undertaking.

Southern Company has had serious problems with its coal ash impoundments in the past. In 2002, years before TVA's Kingston catastrophe brought coal ash to the public's attention, a sinkhole opened up in an impoundment at Georgia Power's Plant Bowen in Bartow County, Ga., eventually covering four acres and reaching 30 feet in depth. The structure's failure released 2.25 million gallons of a water and coal-ash mix to a tributary of the Euharlee Creek that feeds the Etowah River, which in turn provides drinking water to downstream communities.

The incident at Plant Bowen was listed in a 2007 EPA report [pdf] documenting U.S. coal ash damage cases, 137 of which have been discovered to date [pdf]. Also listed in the EPA report as a potential damage case was the Lansing Smith Plant near Panama City, Fla., owned by Southern Company subsidiary Gulf Power. Data collected at that site "indicates that there were documented exceedances of primary drinking water standards for cadmium, chromium and fluoride and secondary drinking water standards for sulfate, chloride, manganese and iron in on-site groundwater" attributable to coal ash, according to the EPA.

The full extent of environmental damages caused by Southern Company's coal ash impoundments is not known. In the absence of federal regulations, coal ash oversight is left up to state authorities. But many coal ash-generating states -- including Alabama, Georgia and Mississippi, all in the Southern Company's service area -- currently require no groundwater monitoring of operating coal ash ponds. In fact, states that do not require monitoring at coal ash ponds account for about 70 percent of the coal ash waste generated nationwide in 2008, as noted in a recent report by the Environmental Integrity Project (EIP), Earthjustice and Sierra Club.

"Contamination of the environment and water supplies with toxic levels of arsenic, lead and other chemicals is a pervasive reality at America's coal ash disposal sites because states are not preventing it," said Jeff Stant, director of EIP's Coal Combustion Waste Initiative. "The case for a national regulation setting common sense safeguards for states to meet, such as liners, monitoring and cleanup standards, could not be more persuasive."

But with the help of Steele and other industry advocates, the Southern Company is fighting to maintain the regulatory status quo. David Ratcliffe, the company's chairman, president and CEO, met with EPA Administrator Lisa Jackson last July as part of a group of utility executives asking her not to regulate coal ash as hazardous waste. He followed up with a letter to Jackson [pdf] in which he reiterated his case, citing the company's financial concerns. In addition, the Southern Company's shareholders recently rejected a resolution seeking better disclosure on the financial risks associated with its coal ash ponds.

Meanwhile, Alabama Power and Georgia Power are still withholding details from the public about the structural stability of their coal ash impoundments, claiming that the data represents confidential business information. North Carolina-based Duke Energy and First Energy of Ohio had made similar claims that were denied by the EPA, but the agency is still in the process of making a final determination on the Southern Company's claims. The EPA acknowledges that the utility "is taking a legally allowable position" -- but notes that it's alone among U.S. power companies.

Yet that's whose interests Steele is defending under the guise of economic and racial justice. Furthermore, he likens what will happen should EPA regulate coal ash as hazardous waste to a "revolution."

"You better get ready," Steele told Facing South. "This is like the civil rights movement -- we're going to have to take it to the streets."

(For more information about the proposed EPA coal ash regulations, click here. The agency is accepting public comments through Nov. 19.)

* Facing South counts the following states as part of the South: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia and West Virginia.