Three Duke Energy Corp. subsidiaries have pleaded guilty to environmental crimes in a North Carolina federal court and will pay $102 million after coal ash pollution illegally leaked from five in-state facilities. This ends the federal investigation stemming from last year’s Dan River coal ash spill. Duke Energy Business Services LLC, Duke Energy Progress Inc. and Duke Energy Carolinas LLC were sentenced by U.S. District Judge Malcolm Howard on nine criminal violations of the Clean Water Act, including criminally negligent discharge of pollutants and failure to maintain treatment equipment.
The penalty includes a $68 million criminal fine, a $24 million community service payment to the National Fish and Wildlife Foundation to benefit river ecosystems in North Carolina and Virginia and $10 million to a wetlands mitigation bank for the purchase of wetlands. Both Duke Energy Carolinas and Duke Energy Progress must also certify that they’ve reserved enough money to meet legal obligations regarding their North Carolina coal ash deposits — an estimated $3.4 billion. Assistant Attorney General John C. Cruden said in a statement:
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. 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.
Duke says that the ruling “officially closes this chapter in company history.” The company said in a statement:
We’ve used the Dan River incident as an opportunity to set a new, industry-leading standard for the management of coal ash. We are implementing innovative and sustainable closure solutions for all of our ash basins, building on the important steps we’ve taken over the past year to strengthen our operations.
The nine charges were filed by U.S. Attorneys in all three of North Carolina’s federal districts over incidents dating back to 2010. Four cover the spill of 82,000 tons of coal ash across 70 miles of the Dan River, while the remaining violations were found as the federal investigation broadened based on allegations of historical violations at Duke’s other facilities. U.S. Attorney Thomas G. Walker said in a statement:
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. 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.
The spill occurred in February 2014 when a broken 48-inch stormwater pipe at a shuttered Duke coal-fired power plant released enough ash from its riverside steam station to fill up to 32 Olympic-sized swimming pools. The ash contained arsenic, copper, lead, mercury and other substances deemed hazardous by the Superfund law, the U.S. Environmental Protection Agency said.
Prosecutors also said Duke failed to maintain equipment at its Cape Fear steam electric plant and illegally released coal ash at its Riverbend steam station, H.F. Lee electric plant and Asheville steam electric generating plant. The cases were transferred into a single proceeding in the Eastern District of North Carolina. Duke is also facing a derivative suit by shareholders who seek to hold management liable for the Dan River spill, a case Duke asked a Delaware Chancery judge earlier this month to stay so it could defend itself in other litigation, including the cases decided Thursday.
In early April, Duke agreed to pay $2.5 million in Virginia as part of a proposed settlement over the Dan River spill, the state’s Department of Environmental Quality said. The money includes $2.25 million for environmental projects benefiting areas affected by the spill and $250,000 for an emergency environmental response fund. The company was hit in March with a $25.1 million fine by North Carolina’s Department of Environmental and Natural Resources, the largest ever issued by the agency, regarding coal ash groundwater contamination at a North Carolina facility. Duke has since appealed the fine.
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