Duke Energy expecting $100 million fine in federal coal ash investigation

Guest Blog | February 19, 2015 | Coal, Energy Policy

In a plea deal to match other major environmental disaster plea deals, Duke Energy appears to be expecting fines around $100 million to resolve, in part, the federal criminal investigation initiated after the massive Dan River coal ash disaster in 2014. Official announcements are pending in the days to come about the criminal charges, but the $100 million fines were discovered in federal disclosure filings and a Duke press release on Feb. 18 and were reported by the Charlotte Observer. The $100 million that Duke Energy disclosed in its earning report as “probable financial exposure” is expected to go to fines, community-service, and mitigation projects.

It has been just one year since a Duke Energy facility had an impoundment failure, dumping up to 39,000 tons of coal ash and 24 million gallons of wastewater into the Dan River. The company already reported spending $20 million to clean up the Dan River site itself, although 90% of the ash still remains in the river. In addition to the federal criminal probe on this disaster, Duke Energy is being sued by multiple organizations including SACE for its ongoing coal ash pollution at the Dan River site. This case has yet to be settled or resolved. A suite of other conservation groups and Riverkeepers represented by the Southern Environmental Law Center have also taken Duke Energy to court to resolve coal ash contamination problems at its 13 other leaky impoundments. Yesterday’s financial disclosure does nothing to resolve these cases or indicate financial culpability to settle them independently.

Duke’s financial exposure on the coal ash criminal investigation already appears to be affecting the bottom line — the Wall Street Journal reported that the company’s profits are falling and 2015 has a “muted” outlook. More and more utilities are realizing the seriousness of the risks associated with their decades-old coal ash pits that are largely unlined and disasters-waiting-to-happen. With the Environmental Protection Agency finally issuing a federal coal ash rule as promised on Dec. 19, 2014, the industry has even greater certainty that coal ash waste is a risk and that more attention is required to ensure impoundments are safe and cleaned up. Groups like ours weren’t very pleased with the strength of the rule, but it’s a start in the right direction to protect public health and our waters from the threats coal ash pose.

To compare how a $100 million fine ranks in terms of environmental disaster settlement amounts, the Charlotte Observer article states that:

“…a $100 million fine would compare with the largest federal criminal fines EPA has won.”

“BP paid $4 billion in criminal fines and penalties, the largest criminal resolution in U.S. history, for the Deepwater Horizon oil spill into the Gulf of Mexico in 2012. Transocean Deepwater paid $400 million for its part in the spill.”

However – “The Tennessee Valley Authority paid only $11.5 million in state fines after a ruptured dike spilled 1.1 billion gallons of coal ash slurry in 2008. Pennsylvania’s PPL paid a $1.5 million state fine for a 2005 spill.”

While we wait for the official announcements about the criminal charges to be filed against Duke Energy, you might be interested in several other coal ash news stories from around our region. Today, our allies in Alabama issued a press release citing concerns about the state’s ongoing expired water permits relating to coal ash. And a stunning new 2-part documentary has just been released about Duke Energy’s coal ash disaster in North Carolina.

Check out Vice News’ “Toxic Waste Spill in North Carolina: Coal Ash (Part 1)”:

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