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Duke Energy Facing $102.2 Million Pollution Charge

Duke Energy Corp. will pay $102.2 million in penalties and damages to settle criminal charges that it violated the federal Clean Water Act by spilling tons of sludgy coal ash into North Carolina’s scenic Dan River last year.

The electric utility, based in Charlotte, N.C., was charged Feb. 20 with nine criminal misdemeanor counts, four of them involving Duke’s Dan River power plant in Eden, N.C. The remaining counts include violations at power plants near Asheville, Charlotte, Goldsboro and Moncure.

Duke was prepared to resolve the charges as soon as they were filed. The settlement included $68.2 million in fines and restitution and $34 million for mitigating projects and community service. The company said the cost would be borne by its shareholders, not passed on to its retail electricity customers.

The settlement, reached in US District Court for the Eastern District of North Carolina also includes five years’ probation for Duke supervised by a court-appointed officer to ensure the company’s compliance. All terms of the deal still must be approved by the court.

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In February 2014, 39,000 tons of coal-ash waste was released from a storage basin at Duke’s retired Dan River Steam Station through a break in a pipe. Further inspections of other coal-waste dumps by both state and federal officials found similar problems at other Duke coal-waste dumps.

In each criminal count, Duke employees are portrayed as “negligently” violating the Clean Water Act by failing to “exercise the degree of care that someone of ordinary prudence would have exercised.” The Duke workers were also accused of aiding and abetting one another.

But the complaint doesn’t accuse them of acting intentionally, and that’s why the charges, though criminal in nature, are misdemeanors, not felonies. “The difference between a misdemeanor and a felony violation is that misdemeanors involve negligence rather than a willful violation,” explained Chapel Hill lawyer Robin Smith, a former state assistant environment secretary.

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Duke said it is taking care of the problems found at each violation site with upgraded equipment or new permits. And CEO Lynn Good apologized for the company’s failure. “We are accountable for what happened at Dan River and have learned from this event,” he said. “We are setting a new standard for coal ash management and implementing smart, sustainable solutions for all of our ash basins.”

D.J. Gerken, a lawyer with the Southern Environmental Law Center, says Duke may have apologized and put up a lot of money to rectify the problem, but that doesn’t ensure that the river is cleaned up. “[W]here we need to end up is a permanent solution to [Duke’s] ongoing pollution of North Carolina’s water and drinking water,” he said.

At the heart of the case is the leftover problem of industries that once burned coal near rivers, especially the more scenic ones that are more important for recreation than for industrial transportation. The shallow Dan River moves 200 miles through rural North Carolina and Virginia and has long been a favorite of locals for swimming and paddling.

By Andy Tully of Oilprice.com

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