From Tom Reeder, assistant secretary of the N.C. Department of Environmental Quality:
The (Raleigh) News & Observer editorial you republished online Oct. 6 regarding the $20 million settlement reached by the N.C. Department of Environmental Quality and Duke Energy overlooked the 2011 Perdue administration policy that was the foundation of Duke Energy’s legal argument.
When DEQ went to enforce its $25 million fine for groundwater contamination at Duke Energy’s Sutton facility near Wilmington, Duke Energy made it clear that it would go to great legal lengths to oppose the department. Duke Energy’s primary argument against the fine was not the evidence of groundwater contamination but rather the intent behind a 2011 policy written by the Perdue administration that was intended to prohibit violations and fines for groundwater contamination at its coal ash facilities.
The Perdue administration began receiving data in 2010 that showed Duke Energy’s coal ash ponds were polluting groundwater at its Sutton facility. Sworn testimony of a former Duke Energy employee shows the utility became aware of the exceedances and voiced its concerns to the state about potential violations and fines because they could affect employee bonuses.
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Instead of making the utility clean up the contaminated water and issuing fines for the pollution, the Perdue administration responded to Duke Energy’s concerns by developing the 2011 policy that limited how penalties could be assessed.
Our actions stand in contrast to the Perdue administration’s inaction on coal ash. The McCrory administration in March 2015 issued the $25 million fine to Duke Energy for groundwater contamination near its Sutton facility. We did so with the understanding that DEQ had the authority to issue penalties under the 2011 policy. The fine was calculated based on the massive scope of the contamination.
Duke Energy immediately challenged the $25 million fine in court. Sworn testimony and emails of former utility employees and former members of the Perdue administration revealed that the intent behind the 2011 policy was to prohibit the state from issuing violations and fines as long as the utility took corrective action. The Charlotte Observer repeatedly failed to mention the 2011 Perdue administration policy in its coverage of the settlement.
The McCrory administration has since rescinded the irresponsible policy to ensure that it has all the tools it needs to enforce the law and penalize future polluters.
This is the not first roadblock the Perdue administration has put in our path that restricted our ability to protect the environment. The Perdue administration also misclassified Sutton Lake to shield the company from increased regulatory requirements. The McCrory administration reversed that decision in November 2014, which Duke Energy immediately challenged in court. Duke Energy is required to withdraw that challenge as part of the settlement.
The decision to settle avoids lengthy and costly litigation while holding all utilities financially accountable for the first time after decades of mismanaging coal ash. Duke Energy is now required to pay an estimated $10-$15 million on faster cleanup of four coal ash facilities as well as a record-breaking $7 million fine that will go to North Carolina’s public schools.
Ultimately, this settlement allows the state to get out of the courtroom and gets Duke Energy in the field cleaning up coal ash.
The state can now devote all of its resources to directing the cleanup and closure of coal ash basins around the state.