On March 8, 2014, the West Virginia Legislature passed a comprehensive bill, primarily in response to the Jan. 9, 2014 leak of fluid containing 4- Methylcyclohexane Methanol (MCHM) from an aboveground storage tank into the Elk River upstream from a public water supply intake located in Charleston, West Virginia. The legislation creates a regulatory framework for certain aboveground storage tanks (“ASTs”), imposes new requirements on public water utilities, and directs the Bureau of Public Health to solicit the assistance of federal agencies inconducting a study of the potential long-term health effects of the Jan. 9 release. 

Senate Bill 373 creates two new statutes - the “Aboveground Storage Tank Water Resources Protection Act” (W.Va. Code Chapter 22, Article 30; the “AST Act”), and the “Public Water Supply Protection Act” (W.Va. Code Chapter 22, Article 31; the “Water Supply Act”). The bill amends certain provisions of the existing Water Resources Protection and Management Act,W.VaCode § 22-26-1, et. seq, (the “Water Survey Act”) and substantially expands the existing statute (at W.Va. Code §§ 16-1-9c and 16-1-9d) governing regulation by the Bureau of Public Health of public water utilities and source water protection standards. The bill also requires large water utilities to install equipment to monitor water quality for certain contaminants or demonstrate why such monitoring is not feasible. Governor Earl Ray Tomblin is expected to sign the legislation into law soon. 

Many aspects of the new regulatory programs established by the bill will have to be fleshed out through formal rulemaking by the West Virginia Department of Environmental Protection (“WVDEP”) or agency policy. Depending upon how that agency approaches its charge, several industrial sectors may be affected. 

Among other major provisions, the new AST Act requires that owners or operators of ASTs with a capacity of 1,320 gallons or more, with certain exclusions, register those tanks with the WVDEP by Oct. 1, 2014. Information must be provided regarding the location of the tank (including proximity to any water supply intake), original construction date, size and volume of the tank, and type and volume of fluid stored. A registration fee (to be fixed by the WVDEP, for the purpose of supporting the registration program) must accompany any such filing, and owners/operators are subject to an undefined “ongoing requirement” to supplement their registrations with “up-to-date information.” It will be unlawful for any person to operate or use an AST after October 1, 2014 that has not been properly registered. 

A separate permit requirement will apply to any person who wishes to construct, maintain, or use an AST after the effective date, which will require the submission of a detailed application form and a permit fee (the amount to be fixed by the WVDEP). If the WVDEP has not yet implemented a permitting program, any person who wishes to place a new AST into service after the effective date of the statute must register the tank and “request permission” from the WVDEP to use it. Subject to rules to be developed by WVDEP, certain categories of ASTs that would otherwise be covered may be granted a waiver from the permit requirement, upon a determination that the ASTs in question are already subject to state or federal regulatory standards that meet or exceed those set forth in the AST Act, or upon a determination that they do not present a substantial risk of contamination. 

Among the performance standards that will be applied to ASTs are requirements for design, construction and maintenance; corrosion and release detection and prevention; and detailed (tank-specific) “Spill Prevention Response Plans,” including secondary containment for any releases. In addition, tank operators will be required to implement systems for early detection of releases and to provide immediate reporting of releases; develop corrective action plans; close and remediate tank sites in accordance with standards to be developed by the WVDEP; have annual inspections conducted (with reports submitted by registered professional engineers or otherwise qualified persons); and provide evidence of adequate financial resources to undertake corrective action. In proposing these new rules, the WVDEP is required to consider nationally recognized tank standards, such as those issued by the American Petroleum Institute and the Steel Tank Institute, and in complying with them, AST owners and operators are required to consult with industry experts on the development of a “life cycle maintenance schedule.” These and other requirements of the statute (and the regulations to be issued by the WVDEP) will be subject to inspection and enforcement by the WVDEP, with potential penalties of up to $ 25,000 per day per violation, as well as criminal penalties and potential actions by the WVDEP seeking injunctive relief to eliminate continuing violations. 

In addition to registration and permit fees, the AST Act authorizes the WVDEP to promulgate regulations for assessing an annual fee to be deposited into the newly created “Protect Our Water Fund.” The fund will provide monies to be used in responding to leaking ASTs when no responsible person is identified and no federal funding is available for any such actions that may be needed to address such a release. 

Finally, the AST Act advances various public informational goals regarding the locations and operations of ASTs in West Virginia. For example, each AST must have a sign that includes appropriate information as required by the programs administered by the U.S. Department of Labor’s Occupational Safety and Health Administration, the WVDEP registration number for the tank, and emergency contact numbers for the owner or operator and for the WVDEP’s Spill Response Hotline. In addition, subject to existing exemptions (and other protections that may apply to sensitive information pertaining to public water supplies), the Act confirms that all information submitted by owners and operators of ASTs is available to the public under the West Virginia Freedom of Information Act, W.Va. Code § 29B-1-1, et seq. 

The new Water Supply Act requires WVDEP to identify all “potentially significant contaminant sources” located with the “zone of critical concern” for public water supplies, which generally extends upstream of a public water intake for the length that water in that stream can travel over a five hour period, and ¼ mile downstream. Owners or operators of contaminant sources identified by WVDEP within a zone of critical concern must, upon notice from WVDEP, register their location with WVDEP, provide detailed information about the potential contaminants, and may be subject to increased regulatory requirements (including permitting) under the authority of both the WVDEP and/or the Bureau for Public Health. Starting Sept. 1, 2014, any facility with an AST governed by a general water discharge (“NPDES”) permit that WVDEP identifies as a potential contaminant source in a zone of critical concern must obtain a more detailed and site-specific individual NPDES permit. Violations are punishable by up to one year in jail plus a fine up to $25,000 for each day of non-compliance. 

Similar changes to the statute governing public water systems create new requirements for those systems to develop “source water protection plans” that address a host of issues, including a contingency plan in case of a contamination event, an assessment of the ability to switch to an alternate water source or isolate or divert contaminated waters, operational information about the treatment plant, storage capacity, and a communication plan. All public water systems will also have to identify potential significant contaminant sources located within each water system’s zone of critical concern. 

The amendment to portions of the Water Survey Act lowers the minimum withdrawal threshold that triggers reporting requirements from 750,000 gallons per month to 300,000 gallons, but excludes certain agricultural operations. Operations withdrawing 300,000 gallons or more in a 30 day period must report the actual quantity of water withdrawn (instead of the previous requirement that only required reporting of changes of 10% or more from the established baseline withdrawal quantity).