USA: Dirty Duke pays $102 million for river pollution

Published by MAC on 2015-05-15
Source: Reuters, New York Times, ENS

Duke Energy pleads guilty to environmental crimes in North Carolina

By Marti Maguire

Reuters

14 May 2015
 
RALEIGH, N.C. -  Duke Energy Corp pleaded guilty on Thursday to environmental crimes over a North Carolina power plant's coal ash spill into a river and management of coal ash basins in the state, U.S. prosecutors said.

The plea entered in federal court in Greenville, North Carolina, by the country's largest utility owner was expected under a settlement with the U.S. Department of Justice announced in February.

As part of the deal, Duke agreed to pay $102 million in fines and environmental projects, and to reserve more than $3 billion to comply with environmental standards.

“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” U.S. Attorney Thomas Walker said in a statement.

The company admitted to failures at five of its power plants over several decades that allowed coal ash to enter waterways, including documented problems with the 48-inch pipe that would eventually cause the spill into the Dan River in February 2014.

The stormwater pipe beneath a coal ash pond at Duke's retired power plant in Eden ruptured, releasing up to 27 million gallons of wastewater and as many as 39,000 tons of coal combustion residue into the river that supplies drinking water to two towns in neighboring Virginia.

Duke “failed to take reasonable steps to minimize or prevent discharge of coal ash to the Dan River that would adversely affect the environment," according to a joint statement filed by the company and prosecutors in federal court.

Duke and its subsidiaries pleaded guilty to nine misdemeanor violations of the Clean Water Act.

In a statement on Tuesday, the company pledged to "operate our system as safely as possible."

Duke has separately agreed to close and clean up coal ash sites at 14 coal plants in North Carolina, though their methods have been disputed.

Duke’s environmental critics lauded the settlement, one of the largest levied for clean water violations, but noted other lawsuits continue .

“This confirms that Duke has committed serious and long-standing environmental crimes,” said John Suttles, an attorney with the Southern Environmental Law Center. “But it does not clean up the coal ash that is every day continuing to contaminate our drinking water.”

(Additional reporting by Jim Brumm; Editing by grant McCool, Diane Craft, Letitia Stein and Bernard Orr)

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Duke Energy Agrees to Pay $102 Million for Breaches

By Richard Faussetmay

New York Times

14 May 2015

Duke Energy, the nation’s largest utility corporation, pleaded guilty on Thursday to criminal violations of the federal Clean Water Act for the discharge of coal ash, a potentially toxic waste product, and for a failure to properly maintain equipment at a number of power plants in its home state of North Carolina. The company also agreed to pay $102 million in fines and environmental fees.

Four of the nine criminal violations stemmed from a massive coal-ash spill on Feb. 2, 2014, at the Charlotte-based company’s Dan River Steam Station in Eden, N.C. The spill sent up to 39,000 tons of coal ash and millions of gallons of coal-ash wastewater into the Dan River, spreading 62 miles to the Virginia border, according to court records.

Coal ash, a waste product generated by coal-fired electric power plants, contains a number of materials, including arsenic, chromium and mercury, that can be hazardous to people and wildlife.

Of the $102 million, $68 million is a criminal penalty assessed under the Clean Water Act. Peter Harrison, a lawyer with Waterkeeper Alliance, a New York City-based environmental nonprofit, said it was believed to be among the highest criminal penalties assessed under the act since its passage in 1972.

Thomas G. Walker, the United States attorney for the Eastern District of North Carolina, said in a statement that the company’s crimes “reflect a breach of the public trust.”

“The massive release at the Dan River coal-ash basin revealed criminal misconduct throughout the state — conduct that will no longer be tolerated under the judgment imposed by the court today,” he said.

The Dan River spill flowed from one of two aging pipes that company officials “failed to properly maintain and inspect,” according to a document called a joint factual statement, which was drafted by the Justice Department and Duke Energy and released Thursday.

The other charges stemmed from a widened investigation that found violations at Duke-owned facilities in Buncombe, Chatham, Wayne and Gaston Counties in North Carolina.

The charges technically came against three Duke Energy subsidiaries. A representative from the parent company entered the guilty pleas on their behalf Thursday at a federal courthouse in Greenville, N.C., where Senior Judge Malcolm J. Howard approved a plea agreement that also requires the company to reimburse the federal, state and local governments for the cost of responding to the spill. The company was also placed on five years’ probation.

The sentencing closes just one chapter in a broader set of legal challenges for the company, which is battling related civil lawsuits in state and federal courts. Environmental activists are hoping to force the company to move 108 million tons of coal ash in unlined pits in North Carolina into more modern storage facilities that they consider more secure.

The company is also appealing a $25.1 million penalty levied by the North Carolina Department of Environment and Natural Resources in March over alleged groundwater contamination from coal ash at the company’s Sutton Plant near Wilmington, N.C.

The company’s environmental record has become tangled in North Carolina’s fiercely partisan political battles in recent years. Gov. Pat McCrory, a Republican, is a former employee of the company, and at the time of the spill, environmental activists accused the state natural resources department of letting the company off lightly for previous environmental violations.

In a statement, the company said it was implementing “innovative and sustainable closure solutions” for its 32 remaining coal-ash basins.

Paige Sheehan, a spokeswoman, said the company had committed to moving some of the coal ash in existing basins to lined landfills. The resolution of the criminal case, she said, “really allows us to continue focusing on the future.”

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Duke Energy hit with shareholder suit in wake of coal ash settlement

Jeff Jeffrey

Triangle Business Journal

29 May 2015

A Duke Energy Corp. shareholder has accused the energy company’s top executives of withholding information about how much they knew about a 2014 coal ash spill, allegedly misleading shareholders and violating federal securities laws in the process. Duke Energy is denying the allegations.

Plaintiff E.F. Greenberg sued 13 of the company’s executives this week in the U.S. District Court for the Eastern District of North Carolina for alleged violations of the Securities Exchange Act.

The lawsuit alleges the executives failed to disclose a settlement with the U.S. Department of Justice and the U.S. Environmental Protection Agency until after they were re-elected during a recent annual meeting. The lawsuit says the executives lied in a proxy statement filed with the SEC about their knowledge of the settlement.

“Despite their obligations under applicable federal law, the director defendants caused Duke to prepare, file and disseminate the proxy statement to Duke shareholders in materially incomplete and misleading form in order to secure the election of directors supported by the director defendants,” the lawsuit says.

Earlier this month, Duke Energy Corp. agreed to pay $102 million after pleading guilty to nine misdemeanor counts related to last year’s coal ash spill on the Dan River and other environmental violations. The company also agreed to five years probation as part of the plea agreement with federal prosecutors.

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Coal ash crimes cost Duke Energy $102 million

Environmental News Service(ENS)

19 May 2015

WASHINGTON, DC – Admitting guilt for a massive coal ash spill last year, three subsidiaries of Duke Energy, the largest utility in the United States, will pay a $68 million criminal fine and spend $34 million to benefit rivers and wetlands in North Carolina and Virginia.

Four of the nine criminal charges relate to the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina in February 2014.

The other five violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.

Coal ash is the waste material left after coal is burned to generate electricity. It contains arsenic, mercury, lead, and other toxic heavy metals.

The $102 million penalty is the largest criminal fine in North Carolina’s federal courts, said Senior U.S. District Judge Malcolm Howard in accepting the agreements between the Duke subsidiaries and prosecutors.

As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of their coal ash basins.

In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.

Under their plea agreements, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations related to their coal ash impoundments in North Carolina, obligations estimated to be $3.4 billion.

“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John Cruden of the Justice Department’s Environment and Natural Resources Division.

“The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law,” Cruden said.

Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, also will be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited.

Results of these audits will be made available to the public to ensure compliance with environmental laws and programs.

“Over two hundred sixteen million Americans rely on surface water as their source of drinking water. Duke Energy put that precious resource at risk in North Carolina as the result of their negligence,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”

The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.

“Duke Energy’s crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina. “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”

Some 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina.

On February 20, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station in Rockingham County, the Cape Fear steam electric plant in Chatham County, the Asheville steam electric generating plant in Buncombe County, the H.F. Lee steam electric plant in Wayne County, and the Riverbend steam station in Gaston County.

The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.

The companies must meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend, and Sutton facilities.

At the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.

Duke subsidiaries also operate facilities with coal ash basins in South Carolina, Kentucky, Indiana and Ohio.