Duke Energy fined millions
Utility pleads guilty to polluting major rivers with coal ash from North Carolina plants.
GREENVILLE, N.C. — Duke Energy, the nation’s largest electrical utility, pleaded guilty in federal court Thursday to nine criminal violations of the Clean Water Act for polluting four major rivers for several years with toxic coal ash from five power plants in North Carolina.
Under a plea deal that ended a federal grand jury investigation, the $50.5-billion company was fined $102 million and placed on five years of probation for environmental crimes. All company compliance related to coal ash in five states will be overseen by a courtappointed monitor and reported to federal parole officers.
U.S. District Judge Malcolm J. Howard approved the agreement after a Duke Energy corporate lawyer, Julia S. Janson, repeated the words, “Guilty, your honor,” for each of the charges against three Duke subsidiaries.
Howard said the fine was the largest ever imposed in federal court in North Carolina. In addition, Duke is required to certify that it has reserved $3.4 billion to meet the coal ash handling conditions of the plea arrangement under state and federal environmental laws.
“Today we said big corporations are not above the law, and polluters who harm our environment will be held accountable,” U.S. Atty. Thomas Walker of the Eastern District of North Carolina said outside the federal courthouse.
While the plea deal ended the federal criminal case against Duke, a senior Environmental Protection Agency official who attended the hearing, Cynthia Giles, said ongoing investigations into Duke’s handling of coal ash could still result in civil enforcement actions.
“Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable,” said Giles, the EPA’s assistant administrator for enforcement and compliance assurance.
Environmentalists had complained for years that Duke was polluting waterways and groundwater with coal ash. But the pollution did not come to widespread public attention until February 2014, when a spill at a Duke coal ash lagoon dumped 39,000 tons of the ash, and 27 million gallons of ash slurry coated the Dan River with thick sludge for nearly 70 miles.
A federal criminal indictment said Duke failed “to exercise the degree of care that someone of ordinary prudence would have exercised in the same circumstance with respect to the discharge of coal ash and coal ash wastewater.”
For years, prosecutors said, Duke officials ignored employee and contractor warnings about a pipe that eventually ruptured and caused the Dan River spill. They rejected proposals that the company spend $20,000 for video inspections of four pipes, including the one that ruptured.
Assistant Atty. Gen. John C. Cruden, who attended the hearing, said the Dan River spill “was a crime, and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise control over coal ash facilities.”
Cruden added: “Duke apologized for their actions — and they should have. And they should have listened to their own employees.”
Only after the spill did Duke began making serious attempts to control leaks from its coal ash dumps on the Dan River and elsewhere in the state, a federal prosecutor told the judge.
“It took the third-largest coal ash spill in U.S. history … to motivate that change,” Assistant U.S. Atty. Banumathi Rangarajan told the court.
Duke officials noted that Chief Executive Lynn Good immediately apologized for the spill and promised to “make things right.”
“That’s what we have done today,” Jim Cooney, a lawyer for Duke, told the judge in a 45-minute presentation that included a slide show. He said Duke’s failure to use video to inspect the Dan River pipe was part of “a series of independent errors over a long period of time” by the utility’s managers and employees.
Coal ash is the residue left after coal is burned to produce electricity. It is typically stored in unlined ponds or pits next to waterways. Coal ash slurry contains toxic heavy metals including arsenic, lead and mercury, which can contaminate groundwater, streams and rivers while also polluting the air.
The Dan River spill focused public and political attention on Duke’s 108 million tons of coal ash stored at 32 North Carolina sites, which environmentalists say have been polluting rivers, streams and groundwater for years.
On Thursday, environmentalists said the plea deal does not require Duke to stop the 200 seeps of coal ash it has acknowledged at power plant sites around the state. The seeps release 3 million gallons of coal ash water a day, much of which ends up in rivers and streams.
“These fines do not clean up that mess,” said John Suttles of the Southern Environmental Law Center, which has sued the utility over coal ash.