Duke Energy to pay Virginia $2.5 million for Dan River spill

Jenny Edwards, program manager for the Dan River Basin Association, scoops coal ash from the banks of the river as state and federal environmental officials investigate the spill in Eden.
Jenny Edwards, program manager for the Dan River Basin Association, scoops coal ash from the banks of the river as state and federal environmental officials investigate the spill in Eden. 2014 AP FILE PHOTO

Duke Energy has agreed to pay Virginia a $2.5 million settlement for its February 2014 coal ash spill into the Dan River.

The spill at a retired power plant in Eden dumped up to 39,000 tons of ash into the river, which flows north into Virginia. Ash flowed 80 miles downstream to Virginia’s Kerr Reservoir.

The agreement pushes Duke’s ash-related costs since the spill to nearly $150 million, including a $25.1 million fine levied by North Carolina that the company will fight.

Virginia’s Department of Environmental Quality said $2.25 million of the money would pay for environmental projects in areas affected by the spill. The rest would go to a fund the department uses to pay for emergency responses.

Department director David Paylor said in a statement that the settlement “ensures that Duke is held fully accountable for the impact of this incident.

“One of DEQ’s top goals has been to make sure that the local communities and the Commonwealth are made whole. This order is the next step in the process.”

A public comment period on the proposal runs through May 20. The State Water Control Board must give final approval.

Bill Hayden, a department spokesman, said the negotiated amount of the fine was based on factors including environmental harm, Duke’s culpability for the incident and its ability to pay.

“The number is lower than I would have hoped, given the communities that have been affected and the fact that the coal ash will remain in the river forever,” said Tiffany Haworth, executive director of the Dan River Basin Association, which advocates for the river.

No immediate environmental problems have been found following the spill, the Virginia department said.

But Haworth, and biologists, say it’s too soon to know the long-term effects the spill will have on the river. Some toxic elements from ash that have dropped into river sediment can be mixed back into the water in certain conditions.

DEQ will continue to monitor water quality, sediment and fish in the river for another two to four years.

Duke has also paid $237,000 to reimburse the state for spill-related costs.

Duke’s North Carolina president, Paul Newton, called the settlement a “fair outcome.

“Although the Dan River coal ash spill occurred in North Carolina, we recognize the number of miles that the river spans in Virginia,” Newton said in a statement. “Duke Energy is committed to working with Virginia DEQ to expedite the benefits of this agreement and to help protect and restore natural resources in the state.”

Other costs Duke has incurred since the spill include:

▪ A $102.2 million settlement of nine federal criminal charges linked to its ash-handling practices in North Carolina. That settlement will go before a federal judge in Greenville for approval on April 16.

▪  A state-record $25.1 million fine by the state of North Carolina over ash contamination of groundwater at its Sutton power plant in Wilmington. Duke has said it will fight that fine, but more are expected.

▪ About $20 million to clean up the Dan River. The operation was completed last summer and removed 2,000 tons of ash and sediment from the river but left most of the spilled material in the river.

▪ Orders by North Carolina’s legislature to close its 32 ash ponds in the state by 2029. The company has estimated that expense at $3.4 billion but is expected to seek permission to pass the costs to customers.

Virginia is also part of an ongoing state-federal assessment of damage to natural resources from the spill. The money is likely to be used for mitigation and restoration projects in the Dan River basin.

Danville, Va., the downriver city closest to the spill, has hired outside counsel to negotiate with Duke over damages but has not filed legal action.

Last week, Duke revealed that its top executives’ pay was docked for the spill by reducing their 2014 short-term incentives by about 35 percent. That cost chief executive Lynn Good about $600,000, according to a securities filing.

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Twitter: @bhender