Is city’s municipalization plan the next ghost at Valmont Butte?

Photo by Jefferson Dodge

When Boulder voters narrowly voted in favor of the 2011 measure to authorize the study and possible approval of a municipal utility, city leaders may not have realized some of the extra costs their grandchildren — if not great-grandchildren — might be inheriting.

Among the unanticipated costs that the city might take on is the responsibility for cleaning up a site that is likely more contaminated than the adjacent Valmont Butte property, a site that Boulder Weekly devoted a 10-part series to documenting in 2012 due to the environmental hazards the city has inherited after purchasing the property in 2000.

The city of Boulder employees charged with analyzing whether or not the city can create its own power utility admit that it would be nice to own a power generation facility close to town, particularly one that could offer consistent flows of electricity to offset any ups and downs among the renewable sources of power it intends to rely on heavily in the future if, in fact, a city utility becomes reality.

So it’s no wonder that these employees have discussed the possibility of acquiring Valmont Station, with its natural gas facilities.

But to acquire Valmont Station would likely also mean acquiring Xcel’s coal-fired plant, now scheduled to be decommissioned in 2017, as well as the rest of Xcel’s property, including the three cooling lakes associated with the aging power plant, which was constructed in the 1920s.

City officials acknowledge they have discussed the possibility of acquiring the plant. But even if the city decides it doesn’t want Valmont Station, depending on who you talk to, it could wind up getting the old plant as a result of its need to condemn the Leggett terminal, which is located on the west side of Valmont Station.

The city acknowledges that it hasn’t created an economic model that includes acquiring Valmont Station, despite the fact that neither Xcel nor the city has ruled out that possibility. It’s just one of the many variables that is missing from the city’s analysis to date. That’s unfortunate, because it’s not something that can be quickly added into the modeling down the road. That’s because acquiring Valmont Station would — or at least should, if handled responsibly by city leaders — require an extensive environmental evaluation before any condemnation procedure or purchase moved forward.

Decommissioning the old coal-fired plant would likely cost between $10 million and $20 million, based on an examination of similar plant decommissionings around the country. But that is where the real potential expense for the city would begin.

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The acquisition of Valmont Station would create a unique risk for the city because of its location, which is south and adjacent to the city’s 102-acre parcel of land on Valmont Butte currently undergoing its own $6.2 million environmental remediation.

As chronicled in BW’s “Ghost of Valmont Butte” series, which ran from January to June of last year, encompassing some 800 hours of research that resulted in a 37,000-word exposé, one of the primary reasons that Valmont Butte was not treated as a Superfund site was because the Environmental Protection Agency (EPA) failed to follow its own protocol when the Valmont Butte site was evaluated and scored for possible Superfund status.

The EPA requires that the entire area contaminated by a single source be treated as one site, regardless of how many people own the contaminated property. In the case of Valmont Butte, Allied Chemical’s fluorspar milling operation contaminated both the city’s 102-acre parcel on the butte as well as Xcel’s property to the south, including the lakes themselves, where millions of gallons of lead- and arsenic-filled water were dumped for decades.

The city’s parcel missed becoming a Superfund site by less than one point on the scoring because the contamination on Xcel’s property was scored as an entirely separate potential Superfund site known as the Culbertson Mill property.

This is not insignificant. Had the city and Xcel sites been properly treated as one contaminated location, then several of the incorrect assumptions by environmental regulators at the state and federal levels — assumptions that have made it possible for the city to do a relatively inexpensive remediation on its property, while leaving all of the contamination in place and simply covering it with rock and dirt — would likely not have been allowed.

One of the more questionable assumptions regarding the city’s Valmont Butte property was that there was no groundwater above the primary holding pond, where about a million tons of radioactive soil containing dangerous levels of heavy metals is now being stored in perpetuity.

If it was determined that groundwater above the primary storage area existed, then that would mean that it is possible for groundwater to migrate down the original drainage ditch, through the contaminated materials, to an 80-yearold earthen dam that is the only barrier between contaminated groundwater and the aquifer below the dam that is used for drinking water and irrigation by nearby property owners.

As described in Part 5 of BW’s series (“Valmont Butte’s got a dam problem,” March 1, 2012), a bizarre incident took place in 1985 wherein an EPA contractor drilled a well above the primary pond, set casing, made a phone call to an unknown person, then inexplicably ordered the casing torn out and the well filled in. This well was not left in place long enough to have tested for slow or seasonal groundwater, yet it has been used as nearly the sole justification for why contamination at Valmont Butte should be allowed to be left where it is rather than going through a very expensive remediation to remove it.

That could change, however, if the city were to come into ownership of the Xcel property. That’s because while doing its own contamination remediation in 2007, Xcel drilled two groundwater monitoring wells on its property, literally just a few feet away from the location of the 1985 “dry” well. Both Xcel wells reached groundwater. While these two Xcel wells were of little consequence to its cleanup of the property south of the city’s parcel, they should have proven that it was likely that groundwater was, in fact, moving into the primary pond at Valmont Butte and, therefore, either the contamination should have been removed from the property altogether, or at minimum, monitoring wells should be placed below the dam to watch for any contamination leaching into the aquifer. This is something that the city has refused to do, citing the supposed lack of groundwater, as demonstrated by the 1985 well.

It’s unclear how the city could justify such lack of action, or its current Valmont Butte remediation plan, for that matter, if it were to suddenly become the proud owner of two monitoring wells that would show that its groundwater assumptions have been badly flawed.

There are other problems that could arise, should the city condemn or purchase Xcel’s Valmont Station property.

The EPA found groundwater contamination at the east end of the city’s Valmont Butte parcel some seven years ago. To date, no one has been required to clean it up, because the EPA said that it couldn’t tell if the contamination came from the city’s property or from the fly ash being disposed of on Xcel’s property. One would assume that if the city owned it all, this excuse for doing nothing would disappear.

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Speaking of fly ash, that, too, could become a huge problem if the city were to own the Xcel property. Fly ash is the byproduct of coal being burned to generate electricity. It contains low levels of mercury and heavy metals. At Valmont Station, as well as at many coal-fired plants, fly ash has been piled and buried for many years, quite legally. The only potential problem apparent at Valmont Station is the fly ash’s close proximity to the cooling lakes, which are still a part of the watershed and which release water periodically into ditches connected to Boulder Creek.

In addition, it appears from a review of historic and current aerial photos that fly ash was used to cover up the heavy metal contamination at the Culbertson site on the Xcel property. This is the contamination that originated from the Allied Chemical operation on the city’s property. What makes this fly ash a big deal is that the EPA appears to be on the verge of making it a regulated contaminant. If that happens, whoever owns the Xcel property would be looking at a healthy clean-up bill.

And finally, at least as far as we know, there is the selenium problem. Selenium is common in the waters surrounding coal-fired plants, and Valmont Station is no exception. Xcel has a special permit that allows it to release selenium-contaminated water into the watershed. Selenium is bad stuff. In humans it causes clubbing of the fingers, skin lesions, loss of hair and nails, tooth decay, convulsions, paralysis and even death. In fish, it can cause missing fins, protruding eyes and grossly deformed spines and heads. In North Carolina, as many as 19 species of fish were killed off from a lake due to selenium in wastewater being discharged from a coal-fired power plant over a 12-year period.

Selenium has been found in a groundwater monitoring well on the city’s Valmont Butte property, at the point where the city’s land is closest to Xcel’s lakes. There is no known historical activity that took place on the city’s property to account for the discovery of selenium, meaning that it most likely came from the lakes or fly ash.

Again, this is important because Xcel’s cooling lakes, two of which were naturally formed, are in contact with groundwater. If the selenium in groundwater on the east end of the city’s 102acre butte property came from Xcel’s lakes, then it is possible that other aquifers to the east and north that are used for drinking water wells could be in jeopardy of similar selenium and/or heavy metal contamination. This is something that should be determined before the Xcel property is purchased or condemned by the city.

Such environmental discovery is particularly important, considering the city’s desire to condemn parts of the Valmont Station property, such as the Leggett terminal, especially if Xcel claims the city has to either take the entire property or none of it at all. That’s because the law is unclear when it comes to condemning contaminated property. If the property were sold, rather than condemned, then both buyer and seller would likely be held responsible for the cost of any future cleanup of the property. But if the city takes the property through condemnation, it may well be taking full financial responsibility for all future environmental cleanup. That is a substantial risk when you’re talking about a 90-year-old coal-fired plant that had millions of gallons of lead-contaminated water poured into its lakes from an Allied Chemical milling operation, to go along with whatever contaminants it created by its own doing.

Clearly, it is difficult-to-impossible to model such unknown expenses as Valmont Station into an analysis of whether or not to create a city utility, but this example does show the kind of problems that the city may well run into in its efforts to form its own utility.

When asked about the likelihood of the city taking Xcel’s entire Valmont property, as opposed to just the Leggett terminal needed for running a local electricity loop, both the city and Xcel were noncommittal, but they acknowledged that there would be a contamination cleanup involved for whoever owns it.

“There are environmental risks with that site, obviously,” says Jonathan Koehn, the city’s regional sustainability coordinator, adding that while a local power generation source is desirable, city officials haven’t decided whether they would try to acquire the entire Valmont plant. The city says the acquisition of Valmont Station is not necessary for providing energy stability, since independent power suppliers can assure continued reliable service. Koehn and Heather Bailey, executive director of energy strategy and electric utility development, agreed that an extensive environmental assessment would have to be done before the city considered taking on that property and its contamination issues.

When asked whether the city would have to acquire the entire Valmont plant in the municipalization plan, Xcel Regional Vice President Jerome Davis says, “I really can’t tell.” But he doesn’t rule out the possibility that the city could end up owning the whole property “and all of the associated issues.” Davis adds, however, that even if Xcel ends up keeping most of the property, the cost of decommissioning the coal-fired plant in 2017 has already been built into the rate structure currently being charged to customers.

Neither side could say definitively whether Xcel would still be liable for any environmental cleanup costs if the city acquired the property through condemnation. They said their attorneys were still looking into the matter.

“We’re in uncharted territory,” Davis says.