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Duke Energy wants to charge customers for some coal ash costs. The state has concerns.

North Carolina Attorney General Josh Stein said he plans to appeal a state regulator's decision to let Duke Energy charge customers in Charlotte and elsewhere hundreds of millions of dollars in coal ash cleanup costs.
North Carolina Attorney General Josh Stein said he plans to appeal a state regulator's decision to let Duke Energy charge customers in Charlotte and elsewhere hundreds of millions of dollars in coal ash cleanup costs. The News & Observer

North Carolina Attorney General Josh Stein said he plans to appeal a state regulator's decision to let Duke Energy charge customers in Charlotte and elsewhere hundreds of millions of dollars in coal ash cleanup costs.

The North Carolina Utilities Commission ruled last week that the Charlotte-based utility can recover from customers the $546 million it has spent to close coal ash storage sites around the state. Duke has incurred the costs since lawmakers ordered it to shutter the sites following a 2014 ash spill into the Dan River.

In its ruling, the commission also hit Duke with a $70 million penalty, saying it mismanaged coal ash. That reduces the amount it can recoup from customers to $476 million. The commission said the penalty will be paid by Duke, not customers.

In an interview with the Observer, Stein said he plans to appeal the ruling to the North Carolina Supreme Court. Stein, a Democrat, said he's troubled that customers will foot such a large portion of coal ash costs.

"Consumers shouldn't have to pay for Duke's mismanagement of coal ash, if it results in greater expenses on the consumers," he said. "So my real concern is that the utilities commission decision puts almost all of the cost on cleaning up coal ash onto consumers, and that's not right."

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Because coal ash is a byproduct of producing electricity, some of the $476 million is appropriate for Duke customers to cover, but not all, he said.

In a statement, Duke said it is seeking clarification from the commission regarding the order, as it also determines how customer rates will change.

The company said it is still deciding what it wants to do next.

The commission issued the order after Duke sought an increase in customers bills in central and western North Carolina. In addition to coal ash costs, Duke has said the higher bills were needed to recoup expenses it incurred to generate cleaner electricity.

But the commission denied the request for higher rates and ordered Duke to cut rates, citing benefits the company is getting from a lower tax rate for corporations approved by Congress last year.

In response to the order, Duke has said base rates across all customer types could fall by 0.1 percent, under a plan that needs commission approval. Base rates cover the costs of producing and delivering electricity to customers. After four years, bills would increase by 1.2 percent on average, Duke said.

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The commission also denied a request by Duke to have customers pay for a multibillion-dollar project known as Power Forward Carolinas, which the company has said will modernize the state's electric system.

Stein applauded that ruling.

"The commission determined that Duke Energy Carolinas is not entitled to a blank check when it comes to the money it spends on the grid," he said. "I am all for grid modernization, but we need to scrutinize Duke's expenditures to make sure that they were good expenditures."

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