Judge rejects $310,000 settlement state reached with coal company for water quality violations

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LOUISVILLE, Kentucky — A judge has rejected a settlement between the state of Kentucky and a coal mining company over water quality monitoring violations from several years ago.

Frasure Creek Mining was accused of falsifying reports on water discharges from its eastern Kentucky mining operations. Such reports are required by state law. In December 2010, state officials reached a $310,000 proposed settlement with the company, but environmental groups argued that the fines were not high enough for what they said were thousands of water quality violations.

Franklin County Circuit Judge Phillip Shepherd later allowed the groups to intervene in the case and sent the case to mediation, but four attempts to get the parties to an agreement failed.

On Monday, Shepherd rejected the proposed settlement, called a consent decree, and returned the matter to the state Energy and Environment Cabinet.

"The consent decree before the court fails to impose penalties that would deter this conduct, and it fails to recognize the important role of the public and interested citizens in monitoring enforcement and ensuring that this conduct will not be repeated ..." Shepherd wrote in a 24-page ruling. The ruling can be appealed.

The environmental groups filed a new motion in federal court earlier this month against Frasure Creek, alleging the company had resumed filing false reports in 2013 and the first half of this year. In both the old cases and the new allegations, the groups said Frasure Creek copied data from previous reports on to new ones, instead of doing the proper water quality monitoring.

"With each false entry on these reports, the company is deceiving regulators and the public about the pollution it may be discharging into Kentucky waters," said Erin Savage, a coordinator with Appalachian Voices.

A spokesman for the state Energy and Environment Cabinet said regulators saw violations on water-monitoring reports from Frasure Creek this year and were processing enforcement actions.

Repeated efforts to reach Frasure Creek, which is based in Scott Depot, West Virginia, have been unsuccessful. The company was involuntarily placed into bankruptcy last year, and that action was finalized earlier this year, according to Shepherd's ruling.

The environmental groups are North Carolina-based Appalachian Voices, the New York-based Waterkeeper Alliance, Kentuckians for the Commonwealth and Kentucky Riverkeeper. Beginning in 2010, they investigated discharge monitoring reports produced by Frasure Creek and another company, ICG. The state reached a consent decree with ICG for $350,000 for violations from 2010, which the environmental groups also challenged. ICG later agreed to pay $575,000.

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