UPDATE 1-Metals pollute waters near US coal ash spill:group

(Adds Tennessee state environment agency agency comment in last paragraph)

By Timothy Gardner

NEW YORK, Jan 2 (Reuters) - Preliminary water tests from rivers near a huge coal ash spill in Tennessee show elevated levels of pollutants such as mercury and lead, a environmental group said on Friday.

"We're concerned that the water poses a greater risk to residents in the area than has been revealed so far," said Matt Wasson, a program director at Appalachian Voices, a environmental group that coordinated the testing of the water with scientists from Appalachian State University.

An earthen dike collapsed on December 22 at the Tennessee Valley Authority's Kingston coal-fired power plant, spilling coal ash across as much as 400 acres (162 hectares). The ash, left from decades of coal burning, had been stored in a sludge pond. The spill extended into a waterway, blocked a road, and ruined three homes, according to the TVA.

Fly ash, a byproduct of burning coal, is known to contain small amounts of heavy metals and other pollutants dangerous to human health. In 2000 the U.S. Environmental Protection Agency decided that the ash would not be managed as a hazardous waste.

The environmental group's tests, which took place on December 27, showed higher levels of the pollutants of arsenic, mercury and lead than reported by the TVA and the U.S. Environmental Protection Agency.

Arsenic levels from the Kingston power plant canal, for example, tested at nearly 300 times the allowable limits in drinking water. A sample from two miles downstream revealed arsenic at about 30 times the limit.

"Although these results are preliminary, we want to release them because of the public health concern and because we believe the TVA and EPA aren't being candid," Robert F. Kennedy, Jr., chair of the Waterkeeper Alliance, said in a release.