Caption: Duke Energy's Dan River Steam Station
released coah ash into the Dan River after a storm water
pipe broke on Feb. 4, 2014.
RALEIGH, N.C. (AP) - Federal prosecutors filed multiple
criminal charges against Duke Energy
(NYSE: DUK) on Friday over years of illegal pollution
leaking from coal ash dumps at five North Carolina power
plants.
The three U.S. Attorney's Offices covering the state charged
Duke with nine misdemeanor counts involving violations of
the Clean Water Act. The prosecutors say the nation's
largest electricity company engaged in unlawful dumping at
coal-fired power plants in Eden, Moncure, Asheville,
Goldsboro and Mt. Holly.
Duke said Friday in statements and court filings that it has
already negotiated a plea agreement under which it will
admit guilt and pay $102 million in fines, restitution and
community service. The company said the costs of the
settlement will be borne by its shareholders, not passed on
to its electricity customers.
The investigation into Duke began last February after a pipe
collapsed under a coal ash dump at the Eden plant, coating
70 miles of the Dan River in gray sludge. However,
prosecutors allege in court filings that Duke's illegal
dumping had been going back for years, to at least 2010.
"We are accountable for what happened at
Dan River and have learned from this event," said Lynn
Good, Duke's president and CEO. "Our highest priorities are
safe operations and the well-being of the people and
communities we serve."
The separate cases will be consolidated under the
jurisdiction of the U.S. District Court in Raleigh. Any
proposed settlement in the case would be subject to approval
by a judge.
Environmental groups on Friday hailed the charges as
vindication for their years of efforts to get regulators to
hold Duke accountable for the pollution leaking from coal
ash dumps at 14 power plants scattered across the state. The
ash, which is the waste left behind when coal is burned to
generate electricity, contains such toxic heavy metals as
arsenic, selenium, chromium and mercury.
"It's not just a slap on the wrist," said Kemp Burdette, of
Cape Fear River Watch. "A $100 million fine is a significant
one. It confirms what we've been saying all along. It's good
to finally have somebody say, 'You're right. Duke was
illegally polluting waterways across North Carolina and it
was criminal. It wasn't an accident.'"
The Associated Press reported last year that environmental
groups tried three times in 2013 to sue Duke under the Clean
Water Act to force the company to clean up its leaky coal
ash dumps. The groups said they were forced to sue after
North Carolina regulators failed to act on evidence
conservationists gathered of ongoing groundwater
contamination at Duke's dumps.
But each time, N.C. Department of Environment and Natural
Resources blocked the citizen lawsuits by intervening at the
last minute to assert its own authority under the act to
take enforcement action in state court.
The administration of
Gov. Pat McCrory, a Republican who worked at Duke for 29
years, then proposed what environmentalists derided as a
"sweetheart deal" under which the Charlotte-based company
worth more than $50 billion would have paid fines of just
$99,111 to settle violations over toxic groundwater leeching
from two of its plants. That agreement, which included no
requirement that Duke immediately stop or clean up the
pollution, was pulled amid intense criticism after the Dan
River spill.
Drew Elliot, spokesman for the state environmental agency,
said regulators had acted appropriately since McCrory took
office and pointed to the Republican governor's Democratic
predecessors.
"We had taken more action than anyone in North Carolina
history had taken," Elliot said. "I won't be able to answer
questions about the (former Gov.) Beverly Perdue
Administration, or the (former Gov. Mike) Easley
Administration."
Duke adamantly denied any wrongdoing for years. But in
December, the company conceded in regulatory filings that it
had identified about 200 leaks and seeps at its 32 coal ash
dumps statewide that together ooze out more than 3 million
gallons of contaminated wastewater each day.
A new state law passed in August requires Duke to either
clean up or permanently cap all of its ash dumps in North
Carolina by 2029.
Jim Cooney, a Charlotte lawyer representing Duke in the
criminal case, said the details of the company's plea
agreement with prosecutors won't be made public until a
court hearing is held sometime in the coming weeks.
Regardless of the precise terms, environmentalists said the
amount Duke will be required to pay signals the company's
culpability.
"Anybody who agrees to pay $100 million is confirming that
they did something wrong," said Frank Holleman, a senior
attorney with the Southern Environmental Law Center. "Duke
Energy cannot buy its way out of its coal ash scandal. It
has to clean its way out."
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