Duke CEO: Customers will cover coal ash removal

Posted March 7, 2014
Updated March 9, 2014

A coal ash pond at the former Lee Steam Station near Goldsboro sits along the Neuse River.

— Duke Energy Chief Executive Lynn Good said Friday that customers will shoulder most of the cost of emptying out the utility's 31 coal ash ponds in North Carolina.

Good's comments, first reported by The Charlotte Observer, were confirmed Friday evening by Duke spokeswoman Paige Sheehan.

Sheehan stressed that the company, not its customers, will pay to clean up the recent 39,000-ton coal ash spill in the Dan River. But if the state requires the utility to close down and move its other existing ash pits, then utility customers, not shareholders, will likely pay most of that cost.

Sheehan referred WRAL News to remarks by Duke Chief Financial Officer Steve Young on a recent corporate earnings call, talking about environmental compliance costs.

"We currently estimate we will spend between $4.5 billion and $5.5 billion over the next 10 years, with $900 million expected to be spent in the 2014 to 2016 time frame," Young told investors on the Feb. 18 call.

"Approximately 85 percent of our expected environmental compliance investments will be in the Carolinas and Indiana. Both of these jurisdictions have a strong track record of allowing utilities to recover costs related to environmental compliance investments," Young said.

Cost "recovery" means a utility's ability to charge its costs back to customers in higher rates, rather than taking costs out of company profits, which would mean lower earnings for shareholders. 

Duke's profits for the past fiscal year were $2.7 billion, with shareholder earnings up 25 percent over the prior year, largely on the strength of the company's controversial merger with Progress Energy. 

Gov. Pat McCrory, a Duke shareholder and former executive who benefited from more than $1 million in direct and indirect campaign donations from the utility and its employees, declined to take a position on Good's statement. Asked whether the governor believes utility customers, rather than corporate shareholders, should be asked to cover the cost of emptying the company's ash ponds, McCrory spokesman Ryan Tronovitch wouldn't answer.

"At this point, we’re still gathering information, and we have asked Duke to send their plans to (the state Department of Environment and Natural Resources), but at the end of the day, this will be handled by the Utilities Commission," Tronovitch said. "The governor has stressed that there needs to be an ongoing public dialogue, and that certainly applies to the cost of cleanup as well."


This blog post is closed for comments.

Oldest First
View all
  • Betty Russell Mar 14, 2014
    user avatar

    The customers should NOT be forced to pay for this

  • ChgoGrl Mar 14, 2014

    No! We will not do it! Where does it say when we sign up for service with them that we're responsible for environmental disasters? It doesn't. I smell a class action law suit and Pronto!

  • 1Moms_View Mar 12, 2014

    If the CEO, board and stockholders benefit from the profits made, they should also expect to pay the costs when poor decisions which lead to additional costs are made. THEY are the ones who cut corners and caused this to happen, not the customers. Progress Energy customers didn't ask for higher costs when Duke took over PE. Now we shouldn't have to shoulder the burden of higher bills because selfish corporate decision-makers failed to comply with safety regulations and the government failed to force them to follow safety measures. Those on the board need to give up their bonuses until these costs are recouped. Then maybe they will start making more sound decisions instead of ones that will pad their already fat pockets. That includes all the politicians on the board. If stockholders aren't happy with having to share in these costs, then they should become active more vocal members who stand up for customers and elect board members who will do their jobs responsibly.

  • Alan Baker Mar 11, 2014
    user avatar

    View quoted thread

    Irrelevant. It happened while McCrory was in charge, and he's the one who needs to step up and demonstrate whether he stands with the company or with the citizens of the state regarding the costs of the cleanup. Your deflection suggests you know exactly how this is going to play out.

  • Jackson Smith Mar 11, 2014
    user avatar

    If we as customers are forced to pay for the mistakes that Duke made, I predict we will have a very different General Assembly and Governor.

  • bmac813 Mar 11, 2014

    I was just wondering , WHY didn't this happen when Perdue was the Governor?
    Right away the media and Liberals go after this Governor. He may have Stocks in Duke BUT so Do I,
    and everyone else who owns Stock.

  • raygillies550 Mar 10, 2014

    This is what weak regulations get you. Welcome to teapublican world.

  • YoureKiddingRight? Mar 10, 2014

    All due respect to previous posters, but aren't we making this more complicated than it needs to be? I have no problems with customers paying a share of the cleanup equivalent to what they would have paid to store the coal ash in a safe and risk-free manner to begin with. Any more than that? Thanks but no thanks - the shareholders get the benefit when the company makes good decisions and does well; they should also shoulder the cost when the company cuts corners and ignores common sense practices that would keep our water (and air) safe and clean for all.

  • xhidden99 Mar 10, 2014

    We were going to anyway. At least he being brutally cynically honest.

  • sunshine1040 Mar 10, 2014

    And this is news who else did anyone think would pay the cost. The CEO has a contract that pays him regardless of what laws are broken and most likely has a clause showing what he will get paid if he leaves the company.