RALEIGH — Contentious behind-the-scenes negotiations on coal ash spilled out into the open this week as the House took up and ultimately passed new legislation despite threats of a veto and lawsuit from Gov. Pat McCrory.

The new bill reconstitutes an oversight commission for coal ash and would re-open the public comment period on the risk and remediation of more than 30 coal ash basins in 14 sites around the state. It also would require Duke Energy to pay for water lines to residents with contaminated wells.

The on-again-off-again bill has been a goal of Rep. Chuck McGrady, the Henderson County Republican who authored much of the state’s coal ash legislation passed in 2014 after a pipe failure sent the contents of two Duke Energy coal ash ponds into the Dan River near Eden.

McGrady wants to reinstate an additional layer of state oversight over coal ash cleanup after the Supreme Court ruled in favor of the governor in a suit challenging the constitutionality of the Coal Ash Management Commission, which was given the job of reviewing administration proposals for cleanup.

Based on the ruling, McCrory disbanded the commission earlier this year, moving all coal ash oversight under the state Department of Environmental Quality.

McGrady said at the time that he would introduce a bill to reconstitute the commission in the upcoming short session, this time with the number of appointments skewed toward the executive branch to avoid the separation of powers issue.

What followed was a back and forth with the McCrory administration over not just the composition, but whether a new commission is needed at all.

Speaking to reporters this week, McGrady said remains a basic disagreement over final say on how to deal with more than 30 coal ash basins in 14 sites throughout the state.

DEQ and the governor want to push ahead with their recently released evaluations of the site, he said, but legislators want an independent review.

“We think there needs to be a two-level process to review coal ash determinations made by the department,” McGrady told reporters this week. “That’s what the intent originally was and that’s what this legislation is intended to do.”

He said DEQ shouldn’t have the last say in the process.

“The reason we put the Coal Ash Management Commission in place is because frankly there wasn’t a lot of public confidence in the department at that time,” he said. “I’m not aware that we suddenly have a lot more public confidence in the department.”

Duke Energy officials backed the bill. “We support this bill because it strengthens North Carolina’s Coal Ash Management Act by providing broad safeguards that protect people, pocketbooks and the environment, as legislators envisioned when they first passed the law,” a statement issued by the company on Wednesday said.

Another round in court

The bill was scheduled to be introduced May 11 in the House Rules Committee, a key gateway for legislation in the short session, but it was pulled at the request of the governor, according to McGrady.

Another planned debut was also rescheduled. Last week, the House completed its work on the state budget and began the weeklong push toward passage of the $2.21 billion spending plan.

With the budget handed over to the Senate and the short session looking like it actually will live up to its name, McGrady, who is one of four main budget chairs for the House, got the green light to move ahead with the new coal ash bill.

On Tuesday afternoon, he huddled with staff in the Rules Committee meeting room waiting for the House to recess for a hearing to introduce the bill.

It was clear by then that no deal had been struck. Moments earlier aides to the governor had handed representatives a statement strongly opposing the bill as they filed into a caucus meeting.

In introducing the bill, McGrady noted an extensive set of legislative findings. The large number of “whereas” phrasings were in anticipation of a legal challenge, he said, and intended to give the courts clarity on the legislature’s intent.

The Rules Committee hearing drew a large crowd of lobbyists along with top officials from the McCrory administration including DEQ Secretary Donald van der Vaart and Robert Stephens, the governor’s top legal counsel. Both men underlined the governor’s objection to the bill.

Stephens, who threatened legislators with a lawsuit over the commission during a hearing on the 2014 legislation, promised another round in the courts. While the governor had more appointments on the proposed commission, Stephens said, the governor still did not have adequate control over it as well as two other commissions with a similar appointment structure that were included in the original lawsuit.

“My message is let’s don’t relive history,” Stephens told the committee. “We know what happened the first time. Let’s don’t do it again. Nobody wants that. The governor does not want that, but if this bill continues on with these three commissions structured the way that they are, he will veto the bill and file a lawsuit.”

Coal ash site rankings influence debate

Although the governor’s position didn’t change in between the first attempt to introduce the bill and this week’s passage, the regulatory landscape did.

DEQ issued its proposed set of rankings for the sites around the state. All of them were listed as either high or intermediate risk, which means that Duke is required to excavate all the basins and move the coal ash to a hazardous waste landfill.

DEQ’s decision was applauded by environmental organizations, which have pushed for moving the coal ash to lined landfills since before the Dan River spill. Despite the victory, there was some concern with DEQ’s request to revisit the rankings in 18 months.

Van der Vaart told committee members at Tuesday’s hearing that DEQ had a difficult time cutting a deal with Duke officials, saying the company had practiced “ extreme brinkmanship” in negotiations. He said only after Duke had been told that all the sites would be listed as intermediate or high risk did the company offer up a plan to run water lines to the residents. He said DEQ wants the additional 18 months to allow for water lines to be hooked up and he also asked for additional flexibility to reconsider the classification of the sites as a result.

But van der Vaart said he objected to addition of the commission and the additional time it would take for it to get up to speed. “The problem is that this bill is far too open ended,” told the committee. Sticking to the existing timetable, he said, would keep pressure on the company.

McGrady said the new site rankings had complicated the discussion. He said he would have preferred the bill be filed at the start of the session, prior to the rankings and reiterated his position that there are some sites where excavation and removal isn’t the right solution.

McGrady said the total volume of ash that would have to be moved is still an unknown, but moving all of it by deadlines set out in the original coal ash legislation may be impossible. That means that sooner or later the aggressive timetables in the original coal ash bill will have to be adjusted, he said. “We shouldn’t have schedules that people can’t rely on.”

Support splits

There were several attempts to amend the bill, including proposals by Buncombe County Democratic Reps. Brian Turner and John Ager. Ager’s amendment would have required the state to set a standard for hexavalent chromium, the contaminant that triggered many of the initial do-not-drink notices. Turner’s would have establish an extensive set of new rules on issuing drinking water advisories. Both were ruled out of order.

In the end, the major change was a provision aimed at resolving the the drinking well contamination issue.

It would require Duke Energy to pay for connections to public water systems and mandates that the company come up with a plan for so by December 1. In cases where there is no feasible way to connect to a public system, company would be required to provide whole house water filtration systems.

The addition won over some legislators who had concerns that residents in their districts who were caught up in the controversy over do not drink notices would ever know if their water was safe.

Rep. Craig Horn, R-Union, said residents in his district are growing impatient.

“They’re looking for a permanent solution rather than plastic bottles,” he said. “When can they expect to have a solution to their problem so we don’t have a Flint Michigan or any other type of problem with contaminated water?”

Reaction among environmental groups varied. The Southern Environmental Law Center, which has represented Mountain True and other organizations in coal ash related lawsuits issued an extensive rebuttal to the bill Thursday, saying it adds further delays and gives Duke too much leeway in determining who might be at risk.

“In short, this bill does nothing to improve the odds that Duke will be required to replace anyone’s contaminated drinking water,” the statement said. “Rather than bickering about a Coal Ash Commission, the General Assembly should allow the existing law to be implemented that requires Duke to move forward with cleanups, as thousands of North Carolinians have demanded.”

The North Carolina Sierra Club also blasted the additional delay, but praised the bill for the added provision on water connections.

“The House today took a step in the right direction to offer relief to residents of communities impacted by coal ash,” Sierra Club communications director Dustin Chicurel-Bayard said in a statement released after passage. “But for the second time in two years, the disagreement between the legislature and the governor over separation of powers issues has interfered with and delayed the state taking action to clean up the millions of tons of coal ash stored in unlined pits across North Carolina.”

The split was also evident in the House itself. Rep. Pricey Harrison, D-Guilford, the Democrats’ point person on environmental issues, announced during debate that she would support the bill to gain back additional oversight.

“Recent actions by our Department of Environmental Quality have left some of our citizen with some lack of confidence in their ability to protect the public health,” she said, citing DEQ’s move to rescind the do-not-drink advisories to hundreds of residents near coal ash sites.

“Those residents need to have confidence that they have the kind of oversight that they need and the protections coming,” she said.

Harrison said she is also concerned about setting a dangerous precedent that could affect other environmental oversight agencies.

“We have other important oversight commissions such as the Environmental Management Commission, the Coastal Resources Commission and other commissions whose role in providing some kind of independent and objective oversight of the agencies is really important,” she said. “We do not want to put that at risk.”

The bill passed by a veto-proof margin of 86 to 25 on second reading and by voice vote on third reading. It now goes to the Senate.

Senate Rules chair Sen. Tom Apodaca, R-Henderson, said the bill would likely be taken up on Tuesday.