A Lake Macquarie community group has slammed a recommendation to approve the expansion of Eraring Power Station's 35 million tonne coal-ash dam by 5 Million cubic metres.
The NSW Environment Protection Authority has also given conditional approval of the expansion despite consultants flagging potential "major hazards".
But the Coal-ash Community Alliance says it is astounded by the recommendation in light of the recently announced Legislative Council inquiry into the costs of remediating coal ash sites.
"Considering the recent closure of the Myuna Bay Sport and Recreation Centre due to threats of the dam walls failing in the event of an earthquake and considering Origin's failure to conform to the 2007 planning guidelines to remediate or reuse 80 per cent - 12 years later Origin are only reusing 35 per cent of their annual coal-ash production - considering all this, it is obvious that the environment watchdog is not doing its job', group spokesman Gary Blaschke said.
The proposed expansion would extend over the abandoned Awaba Colliery, parts of which extracted coal to within 20 metres of the surface. At least one sinkhole has already opened up within the area earmarked for the expansion.
The Coal-ash Community Alliance raised its concerns about the toxic wasteland by the lake during a recent meeting with environment minister Matt Kean.
"The dust had not settled on Minister Kean's investigations after that meeting and the Upper House Inquiry into toxic ash waste had barely started, but behind the scenes the planning department recommends approval for the dam's expansion to the Independent Planning Commission," Mr Blaschke said.
"It is a sad day for the region when the government's planning department doesn't talk with the environment minister or wait for the findings of a Legislative Council inquiry, and goes ahead and approves a development that could have catastrophic consequences for the environment'."
The NSW Parliament's public works committee is examining the legacy of coal ash from coal-fired power plants.
It is estimated the pollutant makes up about 20 per cent of the state's waste stream.
Greens Upper House MP Abigail Boyd said NSW residents deserved to know how the government planned to deal with the toxic byproduct.
"We know from sales documents obtained by the Greens that the State Government retains the bulk of the liability for remediating these polluted sites," she said.
"The Greens are concerned that the Government is putting off closing these polluting power stations because that will trigger potentially billions of dollars in clean-up costs."
- Contamination fears rising from the ashes at Eraring Power Station ash dam
- Coal ash makes up about 20 per cent of the state's waste stream
- Lake Macquarie councillors question Eraring power station ash dam risks after Origin Energy briefing
- State government has no plans to remediate coal ash pollution at Vales Point and Eraring power stations
- Coal ash dumps a 'ticking time bomb': Environmental Justice Australia Report