The companies will pay a fine and conduct community service and wetlands mitigation
Three subsidiaries of North Carolina-based Duke Energy Corp., the largest utility in the U.S., pleaded guilty to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia. Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, N.C., in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the company's other facilities.
Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.
Officials from the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Department of Justice's Environment and Natural Resources Div. and the three U.S. Attorney’s offices in North Carolina, the Internal Revenue Service Criminal Investigations and the North Carolina State Bureau of Investigation made the announcement following a plea hearing at the federal courthouse in Greenville, N.C.
“[More than] 216 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 [its] negligence,” said Cynthia Giles, assistant administrator 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.”
On Feb. 20, 2015, 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 (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County), and the Riverbend steam station (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.
As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia. The companies also 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 its 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.
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. 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.
Approximately 108 million tons of coal ash currently are held in coal ash basins owned and operated by the defendants in North Carolina. Duke Energy Corp. subsidiaries also operate facilities with coal ash basins in South Carolina (approximately 5.99 million tons of coal ash), Kentucky (approximately 1.5 million tons of coal ash), Indiana (approximately 35.6 million tons of coal ash) and Ohio (approximately 5.9 million tons of coal ash).
The companies also 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.
Additionally, at the insistence of the U.S., holding company Duke Energy Corp. has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.