Duke Energy wants to push coal basin cleanup costs onto its customers

Company plans to file rate request with N.C. regulators in June.

A drainage pipe that was the original culprit of the coal ash spill is seen at the Dan River Steam Station in Eden, N.C. CREDIT: AP Photo/Gerry Broome, File
A drainage pipe that was the original culprit of the coal ash spill is seen at the Dan River Steam Station in Eden, N.C. CREDIT: AP Photo/Gerry Broome, File

The bill is finally coming due and Duke Energy’s electric utility in North Carolina wants its customers, not its shareholders, to pay for the company’s ongoing management of coal ash at its coal-fired power plants across the state and the closure of coal ash basins.

Duke Energy plans to file a general rate case application with state regulators on June 1 that will include a request to raise its customers’ rates to cover the coal basin costs.

In February 2014, up to 39,000 tons of coal ash — a toxic byproduct of coal burning that can contain lead, mercury, and arsenic— spilled from Duke Energy’s retired Dan River coal-fired power plant in North Carolina. Duke Energy said publicly at the time that the company and its shareholders would pay for cleanup of the Dan River and any other environmental effects from the spill.

But Duke Energy said any costs related to other actions shown necessary for long-term coal ash solutions at Duke’s 33 basins in the state, including at the Dan River site, would likely be passed on to ratepayers.

“Duke Energy customers will never pay for the company’s response to the 2014 coal ash release at the Dan River Steam Station, or for any coal ash-related fines or penalties the company incurs,” company spokesman Jeff Brooks said in an email to ThinkProgress. “We take responsibility for our actions in those matters and those costs will be borne by Duke Energy shareholders.”

In a May news release, the electric utility, known as Duke Energy Progress, also said it will request permission to recover repair costs from Hurricane Matthew, which struck the state last October, and expenditures on modernizing its power grid and paying for solar energy and other clean energy options.

“We strongly disagree with Duke’s efforts to force their customers to foot the entire bill for cleaning up the coal ash mess they’ve made in North Carolina,” Dave Rogers, campaign representative for the Sierra Club’s Beyond Coal campaign in North Carolina, told ThinkProgress. “For years, Duke has profited from failing to properly monitor and maintain these toxic waste sites. It’s unfortunate that now that the bill comes due that they want to foist the entirety of that responsibility on their customers in the state.”

In a December 2016 filing to the North Carolina commission, Duke’s two utility subsidiaries disclosed they have spent a combined $725 million since 2015 to clean up coal ash ponds in the state. Altogether, Duke is estimating that, in the end, coal basin cleanup costs will total about $4.5 billion, Rogers noted.

Lynn Good, Duke’s president and CEO, said in a statement that her company had learned from the Dan River coal ash spill. “Our highest priorities are safe operations and the well-being of the people and communities we serve,” Good said.

Controversy over coal ash cleanup has dominated Duke Energy President and CEO Lynn Good’s tenure since being named CEO in 2013. CREDIT: AP Photo/Pat Sullivan
Controversy over coal ash cleanup has dominated Duke Energy President and CEO Lynn Good’s tenure since being named CEO in 2013. CREDIT: AP Photo/Pat Sullivan

On Tuesday, Duke alerted the North Carolina Utilities Commission about its plans to file a general rate case in June. The commission requires utilities to give it 30 days’ notice of their intention to seek a rate case. Duke said in a news release that specific details of the request will be finalized when the company completes its filing on or about June 1.

Duke Progress last increased its rates in 2013. The North Carolina commission at that time approved a 5.5-percent increase in the utility’s rates. That increase was linked to the need to recover costs for power plant construction in the state, according to the Charlotte Business Journal. Duke Energy Progress serves 1.3 million electric customers in central and eastern North Carolina and in the Asheville region.

North Carolina’s Department of Environmental Quality fined Duke Energy $6.6 million in February 2016 for the company’s role in the 2014 coal ash spill. The fine covered violations Duke Energy pleaded guilty to in federal court in 2015.

It was later discovered that Duke Energy was warned about the potential for leaks from the Dan River storage pond before the spill occurred, but the company ignored these warnings.

This article has been updated to include a comment from a Duke Energy spokesman and to report that up to 39,000 tons of coal ash was spilled from the company’s Dan River plant site in 2014.