Federal Charges Filed Against Duke Energy

RALEIGH, N.C. (The Raleigh News and Observer/TNS) -

Federal prosecutors Friday filed criminal charges against Duke Energy for illegal discharges from ash ponds across North Carolina, including near Charlotte and Raleigh and in Rockingham County, where a massive spill a year ago triggered intense scrutiny of the company’s environmental management.

Duke said it has reached a settlement agreement with the federal government over nine misdemeanor violations of the Clean Water Act. The settlement would end an investigation of its ash handling that began with a Feb. 2, 2014 spill into the Dan River.

Duke would pay $68.2 million in fines and restitution and $34 million for community service and mitigation projects. The money will come from shareholders, not customers.

The settlement has to be reviewed and approved by a federal judge. Thomas Walker, U.S. Attorney for the Eastern District of North Carolina, where the cases will be transferred, said he would have no comment until they come before a judge.

“We are accountable for what happened at Dan River and have learned from this event,” Duke CEO Lynn Good said in a statement. “We are setting a new standard for coal ash management and implementing smart, sustainable solutions for all our ash basins. Our highest priorities are safe operations and the well-being of the people and communities we serve.”

A criminal bill of information filed in U.S. District Court in Charlotte charges Duke with coal ash and wastewater discharges from an unpermitted drain at a power plant west of Charlotte. A second, similar count is for an Asheville plant.

A third, filed in Raleigh, alleges a discharge of coal ash and coal ash wastewater from an unpermitted drainage ditch. The time period for that discharge was no later than Oct. 2010 through the end of 2014.

Other charges are connected to the spill and illegal discharges at the Dan River plant and maintenance issues at a power plant, Duke said.

The charges say Duke “negligently” discharged the pollutants. Employees failed to “exercise the degree of care that someone of ordinary prudence would have exercised” and aided and abetted each other.

The charges are misdemeanors.

Duke revealed a proposed settlement of the charges Wednesday in an earnings report that put $102 million into a litigation account.

The possibility of criminal charges had hung over the nation’s biggest electric utility for a year.

A February 2014 spill of 39,000 tons of coal ash turned the Dan River the color of cement. The spill prompted a public outcry, investigations and — occurring in Eden, the hometown of N.C. Senate leader Phil Berger — legislators’ scrutiny.

The state Department of Environment and Natural Resources says the federal settlement won’t affect state lawsuits over Duke’s ash ponds — filed under pressure from advocacy groups — or investigation of groundwater contamination.

DENR cited Duke for eight violations at seven power plants after the spill, but has levied no fines. In March, DENR cited Duke for violations after the company pumped 61 million gallons of water from ash ponds into a tributary.

About a dozen environmental groups have been allowed to join the state’s four lawsuits, giving them a say in any settlements regarding 12 of the 14 power plants. The groups have also filed federal lawsuits against several Duke power plants, all still before the courts.

A $100 million settlement would be the second-largest under the landmark 1972 Clean Water Act if it were solely a fine. Instead, the settlement is expected to include money for community-service and mitigation projects.

Such agreements aim to get companies back in compliance with the environmental laws they broke. They often include commitments to improve operations — with costs that can dwarf the fine itself.

BP paid $4 billion in criminal fines and penalties, the largest criminal resolution in the nation’s history, for the Deepwater Horizon oil spill into the Gulf of Mexico in 2012.