Charges Filed Against Country’s Largest Electric Utility Alleging Violations of the Clean Water Act Georgetown International Environmental Law Review

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Charges Filed Against Country’s Largest Electric Utility Alleging Violations of the Clean Water Act

By Taylor Denson, Staff Contributor

This past Friday, federal prosecutors filed misdemeanor charges against electric and gas company Duke Energy, accusing Duke of violating the Clean Water Act by illegally dumping millions of gallons of toxic coal ash—a toxic waste product from generating electricity and contains heavy metals including lead, arsenic, selenium, and mercury—into North Carolina’s Dan River. Duke Energy is the largest electric power holding company in the United States, with approximately 7.2 million electric customers.

More than a year ago, on February 2, 2014, a storm water pipe under an ash basin at the decommissioned Dan River coal plant failed. It took six days for Duke to plug the leak in the storm pipe, allowing nearly 35 million gallons of coal ash into the Dan River. The riverbank was coated in coal ash at points as far as 70 miles downriver.

Despite the catastrophic level of coal ash that leaked into the Dan River, federal prosecutors charged Duke with misdemeanors because the leak involved only negligence by Duke instead of a willful violation of the Clean Water Act, which would have resulted in felony charges. Duke stated that it already negotiated a plea agreement under which it is expected to pay fines. The company’s fourth-quarter earnings estimate included notice of a charge of approximately $100 million, or 14 cents per share. The reported settlement will cost Duke’s shareholders $68.2 million in fines and restitution, and $34 million for community service and mitigation projects.

“The reported settlement will cost Duke’s shareholders $68.2 million in fines and restitution, and $34 million for community service and mitigation projects.”

Presuming the reported totals are accurate, the fine would be the second largest ever assessed in the 43-year history of the Clean Water Act. Early reviews suggest that the large fines are fair, with former North Carolina assistant environmental secretary Robin Smith stating “Just on the face of it, [the settlement] looks proportional but I don’t have all the background facts.” Kemp Burdette, of environmental group Cape Fear River Watch, also clarified, “It’s not just a slap on the wrist. A $100 million fine is a significant one. It confirms what we’ve been saying all along. It’s good to finally have somebody say, ‘You’re right. Duke was illegally polluting waterways across North Carolina and it was criminal. It wasn’t an accident.’”

More charges and fines could be on the horizon for Duke Energy. Neither the federal charges, nor the presumptive fine, will impede state lawsuits against Duke. Aside from the Dan River spill, groundwater contamination from coal ash has been found at each of Duke’s fourteen North Carolina coal-fired plans. North Carolina’s Department of Environment and Natural Resources (DENR) said in a statement “that several of the criminal counts against Duke Energy are consistent with allegations contained in DENR’s civil lawsuits filed against the utility in 2013.”

In December, a mere nine months after the Dan River spill, environmental groups announced that independent testing revealed coal ash leaks from a decommissioned Duke Energy coal plant polluting the Yadkin River in North Carolina, coating the river banks with orange sludge. While the breadth of the damage is not as extensive as the Dan River spill, the community near the stretch of the Yadkin River that was contaminated relies on private wells near the river, and decommissioned power plant, for drinking water. Depending on the levels of pollution found in an investigation, this may lead to more fines and dedicated cleanup efforts for the nation’s largest electric utility company.

“Depending on the levels of pollution found in an investigation, this may lead to more fines and dedicated cleanup efforts for the nation’s largest electric utility company.”

Overall, the Dan River spill and other alleged coal ash leaks could be enormously expensive for Duke Energy. In addition to the fines that Duke will likely pay as a result of the federal plea agreement, North Carolina’s legislature responded to the Dan River spill with legislation requiring Duke to close its coal ash storage sites. Duke has estimated that this closing process will cost $10 billion, along with the extra $300 million needed to clean up the Dan River spill.

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