After Duke Energy reached a plea agreement over its mishandling of coal ash that spilled into the Dan River, Duke CEO Lynn Good said in a statement, "We are accountable for what happened at Dan River and have learned from this event."
What Duke Energy has learned is that it's expensive to be cheap. The giant utility put off the cost of properly storing the millions of tons of coal ash its coal-burning plants produce. The result was regular leakage at most of Duke Energy's storage sites at 14 power plants in North Carolina and a pipe break at one site that spilled an estimated 39,000 tons of toxic coal ash into the Dan River.
Now Duke hopes to resolve a federal criminal investigation into violations of the Clean Water Act by pleading guilty to nine misdemeanor violations and agreeing to pay $68.2 million in fines and restitution and $34 million for community service and mitigation. On top of those costs, the utility also expects to spend $1.3 billion to excavate and close five coal ash storage sites in North Carolina and South Carolina.
If money talks, Duke Energy has gotten a heck of a lecture about its environmental misbehavior. For that, North Carolina should thank the diligent efforts of various environmental groups, especially the Southern Environmental Law Center and Thomas G. Walker, the U.S. attorney for the Eastern District of North Carolina, who initiated a grand jury investigation after the Dan River spill occurred last February.
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One party that North Carolinians need not thank is the state Department of Environment and Natural Resources. The department already had a questionable record of enforcing water pollution rules involving coal ash before Gov. Pat McCrory took office in 2013 with a promise to make state regulation more customer-friendly. The customer, it soon became clear, was business, especially big polluting businesses like Duke Energy, the nation's largest utility.
When the Southern Environmental Law Center moved to file lawsuits to force Duke to clean up its leaking sites, DENR intervened with its own action, effectively blocking the group. Then DENR agreed to settle the problem with a fine of less than $100,000 with no demand that Duke Energy clean up its coal ash sites. DENR backed off the agreement after the Dan River spill exposed how lightly it was dealing with a major environmental threat, but the proposed settlement nonetheless stands in stark contrast to the $102 million federal penalty Walker's office negotiated with the utility.
"The U.S. Department of Justice is the only law enforcement agency that took this seriously and undertook a genuine and complete investigation. The state didn't," said Frank Holleman, senior attorney for the Southern Environmental Law Center.
North Carolina comes out of the Dan River mess with two issues. The first is: How well will Duke clean up its coal ash sites? The material now in unlined, water-filled and leaking pits must be moved to dry storage in lined pits away from waterways and with any leakage subject to treatment. Some coal ash may also be recycled into building materials.
That will be expensive, and the site locations will likely require the further expense of compensating the counties that take the waste. And there will be a debate over who pays - shareholders or ratepayers. But the cleanup must begin soon and be thorough. That Duke Energy got stung by a large federal settlement can't be the end of the issue. As Holleman says, "Duke cannot buy its way out of this coal ash scandal. It has to clean its way out...The bottom line is it is going to have to stop storing coal ash in a way that is polluting our waterways."
The second issue is who is going to clean up DENR? The agency in charge of protecting the environment actually thwarted the SELC's efforts to end the pollution leaking from the coal ash storage sites into groundwater and rivers. It was a cultural and institutional breakdown. Now that Duke has admitted it was a bad customer, McCrory should demand that DENR better serve its real customers, the people of North Carolina.