Duke Energy, NC agree to $7M fine over coal ash leaks

The settlement cuts by more than 70 percent a record $25.1 million fine the state Department of Environmental Quality levied in March for leaks from the ash ponds at the L.V. Sutton Steam Plant near Wilmington. The reduced amount remains the largest fine the state has ever imposed for environmental damage, officials said.

Duke had appealed the fine, claiming that the DEQ had violated its own policies and procedures in assessing it, and the two sides spent much of Monday behind closed doors trying to hammer out a deal before the appeal went before a state administrative law judge.

Officials said the settlement will accelerate the clean-up groundwater contamination at the Sutton plant as well as Duke's Asheville Plant, its H.F. Lee Plant in Goldsboro and its Belews Creek Steam Station in Forsyth County, the only plants where recent tests showed groundwater contamination had spread beyond Duke property. State officials estimated those clean-up costs at $10 million to $15 million.

“This agreement holds Duke Energy accountable for past groundwater contamination and mandates that Duke Energy expeditiously clean up polluted groundwater near its coal ash sites,” DEQ Secretary Donald R. van der Vaart said in a statement. “Our chief goal is to protect the environment and public health while requiring corrective action to restore groundwater quality.”

"We welcome the opportunity to put this issue behind us, allowing us to continue focusing on closing coal ash basins as quickly as the state process will allow," Duke officials said in a statement. "Ultimately, closing ash basins in ways that protect people and the environment will address groundwater concerns."

Duke two years ago paid for water lines to be extended to properties near the Sutton plant, and company officials said contamination at the Asheville, Lee and Belews Creek plans haven't affected any private wells.

Coal ash is the material that's left over when coal is burned for fuel. While much of it is inert, it does contain toxic levels of certain substances, such as thallium, mercury, lead and other materials harmful to humans and wildlife.

Environmental groups contend that both Duke and the state have known for years that the ash pond at the Sutton plant and other power plants have been leaking toxins into groundwater and nearby rivers and streams.

Duke pleaded guilty in May to violating the federal Clean Water Act in connection with leaks at several coal ash ponds across North Carolina – but not the Sutton plant – and agreed to pay $102 million in fines and restitution.

But the company argued that a 2011 state policy encouraged remediation actions for ash pond leaks in lieu of fines.

DEQ officials said Gov. Pat McCrory's administration plans to rescind the 2011 policy to clarify that state government penalize future polluters in addition to requiring clean-up of contaminated sites.

A state law adopted last year requires Duke to close down all of its ash ponds by 2029. A commission was set up to establish a priority list for the effort, but Duke has already started removing ash from several retired plants and has laid out plans to build lined landfills at the Sutton plant and at the Dan River Steam Station in Eden to contain ash.