Climate

Duke Energy Says $25 Million Fine For Years Of Groundwater Pollution Is ‘Regulatory Overreach’

CREDIT:

Girls play on a soccer field near the L.V. Sutton Complex operated by Duke Energy in Wilmington, N.C. Nearly all of Duke's $25 million fine for coal ash contamination at the plant would go into a statewide fund for public schools.

Duke Energy shot back at North Carolina on Tuesday, vowing to contest the record $25 million fine handed down to Duke earlier this month for groundwater contamination at the utility’s coal plant in Wilmington.

Duke accused the state’s Department of Environment and Natural Resources (DENR) of going beyond its authority and not following state procedures. The company, which reported an annual revenue of more than $24 billion last year, also claimed that the fine was bad for business in North Carolina.

“We cannot allow this level of regulatory overreach to go unchallenged,” Paul Newton, Duke’s state president for North Carolina, said in a statement. “The actions by NC DENR send a chilling message to the North Carolina business community.”

When the fine was handed down March 10, the DENC said it calculated the total using daily fine amounts, compounded over the significant length of time Duke allowed pollutants to enter the local watershed. For example, in this case, the state determined that levels of thallium, a toxic heavy metal, exceeded the standard for 1,668 days — more than four and a half years. The daily penalty for thallium pollution in North Carolina is $5,000.

Coal ash is a toxic byproduct of coal-fired power plants. It is often stored near lakes and rivers in coal ash ponds, which can contaminate nearby waterways with thallium as well as mercury, cadmium, and arsenic — elements that have been linked to cancer.

The $25.1 million penalty is nearly five times the amount of the previous largest fine from the DENR and applies exclusively to pollution from Duke’s Sutton coal power plant near Wilmington, which was decommissioned in 2013.

Duke Energy said it will appeal by the April 9 deadline and that it will point to “specific instances” when the DENR “acted contrary to law, exceeded its authority or jurisdiction, and didn’t follow proper rules and procedures.”

Environmentalists in North Carolina criticized both Duke and the state’s handling of the coal ash at the Sutton facility, saying both have known about the pollution issues for years, and neither the fine nor the litigation serve to clean up the water around the site.

“Duke and DENR have had to be dragged kicking and screaming to protect clean water,” Frank Holleman, an attorney with the Southern Environmental Law Center, told ThinkProgress. “Instead of being accountable and protecting the environment, Duke is trying to protect its pocketbook.”

In its statement, Duke did not specifically deny that coal ash leaked into the water near the Sutton plant, but it emphasized its commitment to protecting water in North Carolina.

“We take very seriously our responsibility to care for the communities around our facilities. That’s why we monitored groundwater at the Sutton plant, routinely shared data with the state, and voluntarily acted to ensure local residents continue to have a high-quality water supply,” Newton said.

Holleman said the statement, from the richest utility in the nation, was ridiculous. “That’s a laughable rewriting of history,” he said.

North Carolina Gov. Pat McCrory’s administration has in the past received criticism for lenient fines on Duke, including for a $99,111 fine — which was ultimately rescinded — over similar groundwater contamination after the company spilled 35 million gallons of coal ash into the Dan River in 2014. McCrory worked for Duke for almost 30 years.

The Dan River spill triggered a slew of environmental investigations into the company’s wastewater practices, including at the Sutton plant and four other locations.

Last fall, North Carolina passed the Coal Ash Management Act, which directs Duke to move low-lying coal ash dumps if there is significant risk of contaminating groundwater and gives the company five years to excavate ash in storage at its four highest risk coal-fired power plants.

Since then, Duke has applied for permits to excavate coal ash, including at the Sutton plant. It is awaiting approval from the state, which is expected this summer, the company said.

The state fine is only one part of Duke’s problems.

When asked about the Sutton case, a federal Environmental Protection Agency (EPA) spokesperson told ThinkProgress that Duke is also facing a sentencing hearing for Clean Water Act violations on April 16.