Originally in Hendersonville Times-News
February 1, 2021
Every North Carolinian who pays an electric bill will benefit from an agreement announced this week that shifts $1.1 billion in coal ash cleanup costs from ratepayers to Duke Energy and its shareholders.
The N.C. Supreme Court ruled last month that regulators should revisit an order that would have dumped almost all the cleanup costs on Duke's 3.4 million electric customers in the state.
A proposed settlement announced Monday cuts the amount customers will have to pay toward the cleanup through 2030 from roughly $4 billion to $3 billion, so consumers will still be on the hook for about 75 percent of the costs. The N.C. Utilities Commission must still approve the agreement, and they should.
In the seven years since Duke’s catastrophic coal ash spill into the Dan River, we’ve argued that the utility and its shareholders should share in paying to cleanup millions of tons of coal ash stored in unlined pits. But in 2017, the Utilities Commission issued an order that would have allowed Duke to put the entire cost of the cleanup on customers, minus $102 million in environmental fines.
N.C. Attorney General Josh Stein, the Sierra Club and Public Staff of the N.C. Utilities Commission, which represents consumers, all challenged that order. Duke and its shareholders benefited financially from decades of storing coal ash in unlined basins, so it would not be fair to dump the entire cost of the cleanup on consumers.
Duke is working on closing all 31 of its pits or ponds in the state in part by excavating over 120 million tons of coal ash left over from generations of operations at coal-fired power plants. Many are located near waterways, raising the threat of toxins seeping into rivers and groundwater.
Duke’s Lake Julian power plant in Skyland, for instance, stored ash in two pits, one located perilously close to I-26 and the French Broad River. The utility fully excavated the most risky pit in 2016, and is in the process of excavating the other. Coal is no longer burned at Lake Julian after Duke switched to natural gas fired units last year.
Duke is still calculating how the agreement will translate into average customer savings, but the agreement is expected to reduce pending customer rate proposals by 60%.
The agreement covers cleanup costs from 2015 through 2030 and applies to two previous efforts by Duke Energy to seek rate increases from the Utilities Commission and future requests. The parties in the settlement also asked the commission to keep in place a $102 million penalty against Duke for mismanaging its ash cleanup.
Duke Energy pleaded guilty in 2015 to federal environmental crimes after an investigation found the company allowed coal ash dumps to leak into water supplies.
The settlement "is a win for every single Duke Energy customer," Stein said. It’s a big step toward both a cleaner environment, and a fairer distribution of costs.