Duke Energy agrees to $7 million contamination settlement

U.S. Fish and Wildlife Service officials collect samples following Duke Energy’s spill of coal ash into the Dan River in February 2014.
U.S. Fish and Wildlife Service officials collect samples following Duke Energy’s spill of coal ash into the Dan River in February 2014. U.S. Fish and Wildlife Service

Duke Energy’s $7 million settlement of groundwater contamination issues at its 14 coal-fired power plants in North Carolina includes no admission of wrongdoing.

The agreement with the state Department of Environmental Quality came Tuesday as the two squared off in a state administrative court over a $25.1 million state fine against Duke.

The settlement ends that case, which focused on the Sutton power plant in Wilmington, and the groundwater claims in lawsuits the state filed over all 14 power plants.

It also excuses future groundwater violations as long as Duke complies with state legislation that ordered it to close ash ponds statewide by 2029.

Environmental advocates charged the settlement favors Duke and abandons enforcement by the state.

Contaminated groundwater has been found near ash ponds at all 14 of Duke’s coal plants in the state. Groundwater tests are underway to learn whether ash has also contaminated private wells near the power plants.

The settlement calls for Duke to accelerate cleanup of four sites. DEQ estimated the cleanups will cost $10 million to $15 million. Duke, which says the provision merely formalizes cleanups it announced in June, did not estimate total costs.

Duke’s appeal of the Sutton fine hinged on a DEQ policy memo written three years before Duke’s 2014 spill into the Dan River made coal ash a hot topic. The memo said regulators would seek corrective action before filing violations, and that corrections would replace fines.

Duke says it was never given a chance to fix the Sutton contamination before DEQ fined it. The company had voluntarily agreed in 2013 to pay for a new water line to a neighborhood that is in the expected path of contamination.

“This was never about cleaning up the sites – we’ve already made those commitments,” Duke spokeswoman Paige Sheehan said. “This is really about the legal issues raised in DEQ issuing the fine the way it did. We believe we did everything they asked.”

DEQ said it will rescind the policy. Secretary Donald van der Vaart said in a statement that Tuesday’s settlement will save the state litigation expenses.

“Our chief goal is to protect the environment and public health while requiring corrective action to restore groundwater quality. This settlement resolves the issue of fines for past violations and allows DEQ to commit all of its resources to overseeing Duke Energy’s cleanup process,” he said.

DEQ, known as the Department of Environment and Natural Resources until legislators renamed it this month, has been criticized by environmental advocates for lax policing of Duke. Gov. Pat McCrory was a longtime Duke employee.

The Southern Environmental Law Center, which has sued Duke in federal court over ash contamination, said the settlement doesn’t make Duke do anything it wouldn’t have done anyway.

Senior attorney Frank Holleman said the department “has voluntarily prevented itself from taking action to protect North Carolinians from coal ash pollution of their drinking water by giving Duke amnesty for past, present and future violations” at its power plants.

The settlement still leaves open the portion of the state lawsuits against Duke that deal with illicit seeps from coal ash ponds. Duke has reported hundreds of seeps.

Duke, the state and environmental advocates have agreed to dismiss cases for four power plants that were addressed by the state’s coal ash law. Duke and the advocates have also reached agreement on cleanups of three more plants.

But last month, DEQ asked a judge to delay action on all 10 remaining cases so they could undergo the review prescribed by the ash law.

Under Tuesday’s settlement, Duke will accelerate cleanups at Sutton, its Asheville power plant, the H.F. Lee plant in Goldsboro and the Belews Creek plant in Stokes County. Duke says contaminated groundwater was found outside the boundaries of those plants but has not reached private wells.

Duke has started excavating ash from the retired Riverbend power plant west of Charlotte and plans to excavate 12 ash ponds at four other power plants. Earlier this year Duke announced plans to retire its Asheville plant in four to five years.

Bruce Henderson: 704-358-5051, @bhender