ICYMI: previous administrations went easy on Duke Energy

Wednesday, October 26, 2016 - 4:00pm

The McCrory administration issued the state’s largest-ever penalty for environmental damages in 2015 – fining Duke Energy $25.1 million for coal ash contamination – yet when it tried to enforce the fine it learned that policy decisions made by previous administrations made that impossible.

Duke Energy immediately challenged the $25 million fine and made it clear that it would go to great lengths to fight the penalty for the Sutton facility near Wilmington. The utility asked the court for “dismissal of the penalty at issue in its entirety”, arguing that a 2011 policy written by the Perdue administration was intended to prohibit violations and fines for groundwater contamination at coal ash facilities.

In court documents, Duke Energy stated that “…in early 2011, officials from DENR met with personnel from Duke Energy and Progress Energy to develop a protocol for addressing known groundwater exceedances…”. The utility wrote that “DENR’s established approach specifically contemplated that corrective action would…be in lieu of monetary penalties.”

Recognizing that the administration’s hands were tied by the 2011 policy, the Attorney General’s office and outside counsel advised the state environmental department to settle the fine. The policy, which was crafted in part and reviewed by Duke Energy (as revealed in sworn testimony and the emails of former Duke Energy employees) pre-empted the department’s ability to issue penalties for environmental violations.

As a result, Duke Energy settled with the state $7 million in fines and penalties for past groundwater contamination at all 14 of its coal ash facilities. The company will also spend an estimated $10 - $15 million in accelerated remediation costs as the department enforces a state law that requires Duke to close all of its coal ash ponds.

The McCrory administration’s actions stand in stark contrast to the Perdue administration’s inaction on coal ash. Prior administrations were aware of groundwater exceedances for years but never issued notice of violations, never required Duke Energy to correct the exceedances, and never issued fines.

The state environmental department has since rescinded the irresponsible policy to ensure that it has all the tools it needs to enforce the law and penalize polluters in the future. The state can now devote all of its resources to directing the cleanup and closure of every coal ash basin in North Carolina.