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Proposed Civil Penalty Assessment <br />GCC Energy, LLC / The King I and II Mines <br />NOV CV- 2012 -003 <br />May 11, 2011 <br />Materials reviewed: NOV CV- 2012 -003; various DRMS inspection reports; DRMS letter to GCC dated <br />2/9/12; GCC letter to DRMS dated 4/26/12; DRMS letter to GCC dated 5/3/12. <br />History [Rule 5.04.5(3)(a)]: <br />No NOVs have been issued at this mine during the 12 months preceding the issuance of this NOV. <br />The History component is therefore proposed to be set at $0. <br />Seriousness [Rule 5.04.5(3)(b)]: <br />The Seriousness component of a proposed assessment may range from $0 to $1750. The amount <br />proposed depends upon whether the violation was one of performance requirements or of <br />administrative requirements. This NOV was written for a violation of performance requirements. <br />In the case of a violation of performance requirements, the amount to be assessed for Seriousness <br />depends upon (1) the probability of the occurrence of the event which a violated standard is <br />designed to prevent, and (2) the duration and extent of the potential or actual damage in terms of <br />area and impact on the public or environment. <br />(1) <br />Fault [Rule 5.04.5(3)(c)]: <br />Rules 2.05.3(8), 4.09, 4.10 and 4.11 are designed to protect surface and ground water <br />resources at coal mine waste disposal areas, and to prevent spontaneous combustion of coal <br />mine waste and geotechnical instability of waste disposal structures. As coal mine waste was <br />placed in a manner not in accordance with these regulations, the probability that hydrologic <br />impacts, spontaneous combustion and /or geotechnical instability might occur seems to exist. <br />(2) Damage to the public or environment does not exist, nor does potential damage to the public. <br />Though potential impacts to water resources seem possible, duration and extent are uncertain. <br />The Seriousness component of this assessment is therefore proposed to be set at $500. <br />The fault component of a proposed civil penalty assessment may range from $0 to $1500. <br />Assessments of "unavoidable" violations may range from $0 to $250. Assessments for violations <br />that were the result of "negligence" may range from $250 to $750. Assessments for violations that <br />resulted from "intentional conduct" may range from $750 to $1500. <br />The permittee placed coal mine waste in a manner not fully compliant with state law, state rules, <br />and its permit, even after receiving a DRMS letter dated 2/9/12 informing the permittee of the <br />applicable coal mine waste rules. This appears to be a moderately high degree of negligence. <br />The Fault component is therefore proposed to be set at $700. <br />Good Faith in Achieving Compliance [Rule 5.04.5(3)(d)]: <br />This NOV has not yet been terminated. <br />Good faith credit is therefore not proposed at this time. <br />The Total Proposed Civil Penalty Assessment for this NOV is therefore set at $1200. <br />