Environmental groups challenge state settlement with Duke Energy

Conservation groups have asked judges in Wake and Mecklenburg counties to reject a $7 million agreement between the state and Duke Energy to settle years of groundwater contamination violations.

In court documents filed on Tuesday, attorneys from the Southern Environmental Law Center say an administrative law judge overstepped his bounds last month when he signed off on an agreement between the utility and the state Department of Environmental Quality that let Duke off the hook for a $25 million fine levied earlier in the year.

In addition to lowering the amount of money the utility owes the state, the environmental law attorneys contend the agreement ties the hand of the state from enforcing groundwater pollution laws at Duke’s 14 leaking coal ash sites.

“The administration twisted a simple penalty dispute into a bad settlement that reneges on its promise to clean up every leaking coal ash pit across North Carolina,” said D.J. Gerken, a managing attorney for SELC, which is representing eight groups that have raised concerns about coal-ash pollution across the state.

A spokeswoman for Duke Energy responded on Tuesday that “SELC needs to take ‘yes’ for an answer.”

“Duke Energy will close all 32 basins at 14 facilities in ways that protect people and the environment,” Paige Sheehan, the spokeswoman for the utility said in a statement. “We agree that basins should be safely closed. We volunteered to do it and it’s now required by the Coal Ash Management Act, an aggressive new state law. ... The law actually strengthens the state’s regulatory oversight of our operations through enhanced reporting by DEQ and the creation of the Coal Ash Management Commission.”

Derb Carter, a senior attorney at SELC, contended otherwise. “The settlement doesn’t bind Duke Energy to do anything,” he said.

The SELC held a news conference on the steps of the Wake County courthouse two weeks after the $7 million settlement was announced at a hearing presided over by Administrative Law Judge Phil Berger Jr., son of the president pro tempore of the state Senate. The attorneys are representing Appalachian Voices, Cape Fear Riverwatch, Catawba Riverkeeper Foundation, Dan River Basin Association, MountainTrue, Neuse Riverkeeper Foundation, Roanoke River Basin Association, Southern Alliance for Clean Energy, Waterkeeper Alliance, Winyah Rivers Foundation, and Yadkin Riverkeeper.

Before the settlement on Sept. 29, Duke was protesting a record $25.1 million fine that state regulators had levied against the utility in March. State regulators had deemed that coal ash from the Sutton Steam Electric Plant in Wilmington had contaminated local groundwater from 2009 to 2015.

Duke contended the fine – the state’s largest ever issued for environmental damage – was ginned up by the state regulators to give political cover to Republican Gov. Pat McCrory, a former Duke employee of 29 years, from charges of cronyism.

The environmental agency responded that the size of the penalty was calculated on years of groundwater contamination seeping from coal ash pits at the power plant near Wilmington. Duke took over the plant as part of its acquisition of Raleigh-based Progress Energy in 2012.

When asked for comment on Tuesday, a DEQ spokeswoman contended that acts of previous administrations had “undercut” their ability to levy fines. Crystal Feldman, the spokeswoman, added that the settlement, which was arrived at after consulting with the N.C. attorney general’s office, “gets the state out of the courtroom and Duke into the field to clean up coal ash.”

Coal ash problems in the state go back decades, when electric utilities dumped the ash from coal-burning power plants into large open pits. It has only been in recent years that public awareness has caught up with the ecological shortsightedness of depositing carcinogens and other toxic waste near drinking water sources.

North Carolina’s legislature passed a comprehensive coal ash management law last year, and Duke is now on track to shut down and clean up seven of its 14 sites where coal ash is stored, with the remaining seven sites under review.

The legislative action came in the wake of a highly publicized spill at a Dan River site in February 2014.

Several lawsuits are pending in state court over the matter, and the SELC contends that it is in those proceedings, not in the administrative hearings challenging the size of the fine, where any settlement should occur.

Gerken said Tuesday that the “midnight settlement,” negotiated between Duke and state regulators outside public scrutiny, could undo the ability of state regulators to enforce the law in years to come.

Amy Brown, a Belmont resident who lives near a Catawba River site, and Deborah Graham, a Salisbury resident who lives near the Buck Steam plant along the Yadkin River, were in Raleigh on Tuesday to criticize the settlement.

Graham, who has been living on bottled water since April, when state testing showed pollutants in her water source, questioned why the Yadkin River site was not on a list for accelerated cleanup. She said state regulators had protected the utility in its settlement.

“DEQ has a job to protect the people of this great state,” Graham said. “They have failed us.”

Brown, who also has been advised not to drink or cook with her water, questioned whether state regulators and the governor were watching out for the people of the state by accepting the settlement proposal.

“This has us wondering once again who can we trust,” Brown said. “Who other than Duke does this benefit?”

Anne Blythe: 919-836-4948, @AnneBlythe1