Duke: Coal ash spill won't affect bottom line

Apr. 17, 2014 @ 09:37 PM

Duke Energy told shareholders Thursday that cleanup costs resulting from its massive coal ash spill into the Dan River won't have a material effect on the $50 billion company's bottom line.

The nation's largest electric company said in a regulatory filing with the U.S. Securities and Exchange Commission that it had spent $15 million so far on plugging the collapsed pipe at its Eden power plant that triggered a Feb. 2 spill and polluted 70 miles of the Dan River with toxic sludge. The company has also begun the process of trying to dredge some of the spilled ash from the river.

Duke said it can't yet assess what costs may result from new laws affecting how the company handles the ash at its 33 coal ash dumps in North Carolina, or from future legal claims, litigation or environmental fines.

Duke's statement to investors came a day after North Carolina Gov. Pat McCrory unveiled a proposal he touted as strengthening government oversight of the state's coal ash dumps. But the governor's plan didn't address the key issue of what will happen to Duke's ash pits.

McCrory said his plan would result in the "conversion or closure" of the dumps and close legal loopholes that allowed the nation's largest electricity company to avoid cleaning up groundwater contamination leaching from unlined ash pits at 14 coal-fired power plants across the state.

All of Duke's ash pits are along the state's rivers and lakes — and the governor's plan doesn't force the company to move them.

Instead, it allows Duke to study the issue and set a timetable for how to eventually close the waste dumps.

Environmentalists on Thursday sharply criticized McCrory's plan, saying it doesn't go far enough.

They also said language in the governor's plan contains some of the same wording included in a recently scrapped consent order between Duke and the state Department of Environment and Natural Resources.

"Some of the language was copied verbatim. This shows the close coordination between Duke Energy and state regulators," said Frank Holleman, a senior attorney for the Southern Environmental Law Center.

The consent order would have allowed Duke to resolve violations at two coal ash dumps — one in Ashville, the other near Charlotte — by paying a $99,000 fine with no requirement that the company clean up its pollution. It had been reached months before the Feb. 2 spill focused public attention on Duke's history of polluting groundwater with its leaky, unlined coal ash dumps.

In an email, Drew Elliot, a spokesman for the state environmental agency, acknowledged that the language in the governor's bill and consent order are similar, but said that is not unusual.

He said the government agencies, such as the Environmental Protection Agency, take similar steps when they prepare remediation plans.

Environmentalists are pushing McCrory's administration to use what they say is the state's existing legal authority to require Duke to haul more than 100 million tons of the toxic ash away from waterways to lined landfills licensed to handle hazardous waste. Coal ash contains numerous chemicals that are harmful to people and wildlife, including arsenic, mercury and lead.

In a letter to the state last month, Duke CEO Lynn Good said the company would remove the ash from its dumps at the Dan River plant and another plant while the company studies options at its remaining sites. Among those options is draining contaminated water from the pits and then covering the remaining ash with soil and giant tarps.

McCrory worked at Duke for more than 28 years before retiring to launch an unsuccessful campaign for governor in 2008. He has denied that his administration gave any special treatment to his former employer.

But Holleman said there is some irony in the governor asking the public to trust state regulators and Duke.

"This is crazy. The governor is saying we should trust DENR and Duke. Yet they're both appearing before a federal criminal grand jury about their coal ash activities," he said.

Federal prosecutors have issued at least 23 subpoenas seeking records and grand jury testimony as part of a criminal investigation into the state's oversight of Duke's coal ash dumps.

Holleman said the governor's bill fails to set clear deadlines and strict environmental and public health standards that Duke would need to meet.

For example, there are no deadlines for initiating or completing closure of ash pits, or for sampling wells within a half-mile from coal ash sites.

In general, most deadlines are left to the discretion of Duke; the few deadlines that are mentioned include a clause that allows state regulars to waive the deadline, Holleman said.

Donna Lisenby, Global Coal Campaign Coordinator for Waterkeeper Alliance, agreed.

"This is just another blatant example of the governor completely ignoring the voters and tax payers of North Carolina by making a gratuitous attempt to exempt his former employer from any real or meaningful requirements to clean up their toxic ash ponds," she said.

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Biesecker reported from Raleigh. AP Business Writer Emery P. Dalesio contributed.

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