Duke CEO: Customers will cover coal ash removal
Posted March 7, 2014
Updated March 9, 2014
Charlotte, N.C. — 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."