Samples taken near the spill slightly exceed drinking water standards for toxic substances, and arsenic in one sample was higher than the maximum level allowed for drinking water, according to a news release from the Tennessee Valley Authority, which operates the power plant where the spill occurred, the Environmental Protection Agency and other officials.
TVA spokesman Jim Allen said there are four private drinking water wells in the area affected by the spill and the agency should have tests from them this week.
The spill was three times greater than what the TVA first reported, reports CBS News correspondent Mark Strassmann.
"I think they were beyond the actual slide point of the material," EPA spokeswoman Laura Niles said of the wells. "There shouldn't be direct impact, but that's why they are sampling."
Crystell Flinn lost her home - but worries about saving her health.
"It's devastating. It's unbelievable. You just can't imagine," she told Strassmann.
Arsenic occurs naturally in the environment, but elevated levels can cause ailments ranging from nausea to partial paralysis, and long-term exposure has been linked to several types of cancer, according to the EPA.
Authorities have said the municipal water supply is safe to drink.
The warning came a week after a retention pond burst at the Kingston Steam Plant, spreading more than a billion gallons of fly ash mixed with water over roughly 300 acres of Roane County and into a river. The deluge destroyed three homes and damaged 42 parcels of land, but there were no serious injuries.
However, environmental concerns could grow when the sludge containing the fly ash, a fine powdery material, dries out. The federal Environmental Protection agency and the TVA have begun air monitoring and on Monday advised people to avoid activities that could stir up dust, such as children or pets playing outside.
The dust can contain metals, including arsenic, that irritate the skin and can aggravate pre-existing condition such as asthma, Niles said.
The EPA recommends that anyone exposed to the dust should wash thoroughly with soap and water and wash the affected clothes separately from other garments.
The spill could change the way the nation's largest government-owned utility stores coal waste. On Monday, officials in Roane County said they are pushing the TVA to quit using large retention ponds filled with a mix of water and fly ash, a byproduct of coal-fired power plants.
Roane County Executive Mike Farmer said that he has talked with TVA officials and doesn't expect to see that type of holding pond on the TVA property in the future.
"I don't think Roane County would be happy to see that type of storage facility ... long-term," Farmer said.
TVA Chief Executive and President Tom Kilgore also told residents at a public meeting Sunday that his agency is looking at disposal options at the plant roughly 35 miles west of Knoxville.
Farmer said county officials are reviewing documents from TVA about the pond failure and will also get an independent engineering firm to evaluate them. The utility is still investigating what caused the dike to burst but officials have speculated that cold weather and above-normal rains were contributing factors.
TVA Inspector General Richard Moore said Monday that his office will investigate the spill and TVA's response to it. The inspector general's office is independent from TVA but will coordinate its work with EPA and Tennessee environmental regulators.
Knoxville-based TVA supplies electricity to Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.