Duke Energy vows to contest $25 million groundwater contamination fine

March 27, 2015

North Carolina's environmental agency has hit Duke Energy, the nation's largest electric utility company, with the highest environmental fine in state history. The hefty $25.1 million fine is for groundwater contamination at the company's coal plant in Wilmington.

The North Carolina Department of Environment and Natural Resources (DENR) handed down the record fine following investigations triggered by the 2014 Dan River spill. During that incident, a stormwater pipe under a coal ash pond at an Eden, North Carolina plant, burst and drained tens of thousands of tons of coal ash into the Dan River. The accident resulted in a slew of state and federal investigations and a series of eight citations against Duke Energy for environmental violations discovered between February and March 2015. 

"Today's enforcement action continues the aggressive approach this administration has taken on coal ash," DENR Secretary Donald R. van der Vaart said in a statement. "In addition to holding the utility accountable for past contamination we have found across the state, we are also moving expeditiously to remove the threat to our waterways and groundwater from coal ash ponds statewide."

Critics of the fine are divided into two groups. One believes that the fine is the bare minimum for a company with an annual revenue of $24 billion. Frank Holleman, an attorney with the Southern Environmental Law Center, told ThinkProgress that writing a check would be easy for the energy giant, and that the affected community truly needs an active cleanup effort alongside the financial penalty. The DENR fine simply requires payment and does not demand any elimination of the coal ash pollution that caused the problem.

Last fall, North Carolina passed the Coal Ash Management Act, which ordered Duke Energy to move low-lying coal ash dumps if there was significant risk of contaminating groundwater, granting the company five years to excavate ash in storage at its four highest risk coal-fired power plants.

According to Holleman, the bill is ineffective because it fails to address pollution caused by coal ash. Removing ash from unlined storage sites is important, but so is repairing the damage already done. Holleman states that the DENR act does not mandate cleanup and Duke Energy has taken no steps to remedy the situation. "Duke and DENR have had to be dragged kicking and screaming to protect clean water," Holleman added.

The other group of critics are from Duke Energy itself, claiming that the heavy fine is "regulatory overreach" on the part of the DENR. Paul Newton, Duke's state president for North Carolina, said in a statement that the actions of North Carolina's environmental agency painted a "chilling picture" for the state's businesses.

Duke says that the DENR is going beyond its authority and not following state procedures. The energy company plans to contest the $25.1 million dollar fine, saying that it can prove that the DENR was acting out of its jurisdiction.

The electricity provider also alleges that the reason it has been unable to begin cleanup is because of the environmental agency. They stated that they were waiting on DENR approvals to begin moving ash at their sites.

The electric utility also faces criminal charges in federal court over alleged violations of the Clean Water Act. Duke will face a sentencing hearing for those charges in April. In that case, Duke is expected to take a plea deal which would require the company to pay a total of $102.2 million, to be divided between financial penalties and cleanup funds.

By partnering with environmental consultants companies can conduct regular groundwater assessments to ensure that they are complying with state and federal regulations.