By Marti Maguire
RALEIGH, N.C., Feb 25 (Reuters) - State regulators in North Carolina may force Duke Energy Corp to move thousands of tons of coal ash from storage ponds at a power plant to a lined landfill after a massive spill this month contaminated water and wildlife in the Dan River.
The state's Department of Environmental and Natural Resources (DENR) said on Tuesday that it planned to modify a permit that has allowed Duke to discharge certain amounts of wastewater from its retired facility in Eden, North Carolina, into the river.
At least 30,000 tons of toxic coal ash were released into the Dan River when a pipe broke under the 27-acre (11-hectare) ash pond in a spill discovered on Feb. 2. State officials found a second leak of arsenic-laced discharge from another pipe during their investigation.
Both leaks have been plugged, according to Duke and the state regulator. Two towns in neighboring Virginia, Danville and South Boston, get their drinking water from the river.
Tom Reeder, director of the regulator's Division of Water Resources, said his agency is focusing on how to protect the river now that the spills have been stopped.
"Based on our investigation of this spill, one option under consideration right now is to eliminate all coal ash waste discharges coming from this facility and require that Duke Energy move the coal ash waste stored onsite to a lined landfill away from any waterways," Reeder said in a statement.
Duke has 60 days to comment on proposed changes to the permit.
"We will respond to the state and work to determine the most appropriate resolution," Duke spokesman Thomas Williams said. "As we have stated, our company is taking another look at how we manage ash basins."
The landfill solution has been long favored by environmentalists concerned about the risks posed by the ash.
"It is a good sign that DENR has, in writing, embraced our solution of moving the coal ash out of these unlined lagoons," said Frank Holleman, senior attorney with the Southern Environmental Law Center. "But we need action, not merely words."
Federal prosecutors have issued subpoenas to employees of Duke and the state environmental regulator as part of a widening probe into possible felony violations at North Carolina's 14 coal ash sites.
The agency has come under fire for its handling of the state's coal ash ponds, which it concedes are contaminating groundwater. It filed suit against Duke last year, and then proposed a settlement that environmental groups oppose.
That proposed settlement has been on hold since the spill. In a letter dated Feb. 20, DENR notified a judge that it may move forward with the settlement. The agency must decide by March 21 how to proceed.
While the action announced by the state on Tuesday would apply only to the Dan River site, a task force within the agency is reviewing discharge permits at the state's 13 other coal ash sites, all owned by Duke.
Drinking water from the river has been deemed safe once it is treated. State officials started testing fish tissue this week to determine if fish from the river is safe to eat. They have advised people not to eat the fish for now and to avoid prolonged contact with the water.