Judge reviewing state settlement with Duke over coal ash

Under the arrangement signed by an administrative law judge last fall, Duke would pay $7 million for long-term pollution problems caused by unlined coal ash pits at 14 sites across the state. Environmental groups have called that a "sweetheart deal," saying it fails to force the company to clean up those pits quickly and fails to hold Duke accountable for damage done by the leaks into local water supplies.

The Southern Environmental Law Center, which has been an intervenor in many of the lawsuits, filed the protest Superior Court Judge Paul Ridgeway heard Friday, arguing seven lawsuits against the company should go forward. The SELC argued that the Office of Administrative Hearings could sign off on the deal for the Sutton plant fine, but doesn't have the authority to settle those separate cases or foreclose related cases.

The Department of Environmental Quality and Duke "purported to resolve all the claims regarding cleanup of groundwater pollution across the state, and even went so far as the state saying we won't even use evidence that we have in our hands to enforce the law. It's a remarkable agreement," said Frank Holleman, an attorney for SELC.

Ridgeway appeared to agree.

"This order has language that, in my view, goes beyond resolving a penalties case," Ridgeway said. "''Fair and comprehensive resolution of other groundwater controversies' – that is more than just dismissing a case for mootness."

Ridgeway pointed out that, although all parties agreed the language of Berger’s ruling was overly broad, neither the state nor Duke – both parties to that ruling – had asked Berger to modify and narrow his ruling, a simple solution that would have made today’s hearing unnecessary.

“I have to suspect that there is some ulterior motive, and that there is the concern that at some point, there will be some preclusive effect or some judicial approval of a settlement agreement through this vehicle,” he said. “I don’t know of any other reasonable suspicion to have, based on what I have in front of me."

While Ridgeway said he was glad Duke and the state were working together to reach a resolution, he added,"If this settlement is going to be approved, it will be done with the court's approval. and it will be done with the participation of the intervenors."

The SELC represents a number of groups, including Appalachian Voices, Cape Fear Riverwatch, Catawba Riverkeeper Foundation, Dan River Basin Association, MountainTrue, Neuse Riverkeeper Foundation, Roanoke River Basin Association, Sierra Club, Southern Alliance for Clean Energy, Waterkeeper Alliance, Winyah Rivers Foundation and the Yadkin Riverkeeper.

Coal ash has been a long-simmering problem in the state, but was ignored by the general public until a Feb. 2, 2014, spill dumped 40,000 tons of the toxin-laced material into the Dan River from a shuttered Duke power plant. The state has fined the company $6.6 million for the pollution related to the Dan River spill for violations the company pleaded guilty to in federal court. Federal regulators fined the company $102 million over the spill and unlawful discharges from ash ponds at four other plants across the state.

That spill focused attention on the McCrory administration's dealings with Duke.

In particular, environmental groups had been pushing the company to clean up unlined coal ash pits across the state for years, saying that they have allowed a slow seeping of toxins into local streams, lakes and groundwater supplies. The state and groups like the SELC have sparred over who better serves the public's interest. The SELC accuses the DEQ of getting in the way of court actions to force Duke to clean up the pollution.

DEQ regulators say they are merely undertaking their responsibility to enforce the state's pollution regulations and accuse SELC of getting in the way of efficient settlements.

While the DEQ and Duke say the matter is closed, the SELC argued that Ridgeway should at least review the deal. Ridgeway agreed.

"We don’t know what they did or why they did it," Holleman said. "All we know is they came out with a settlement that purported to do away with all the public’s claims on groundwater across the state."

Attorneys for the state wouldn't comment after Friday's hearing. But DEQ Deputy Secretary Tom Reeder recently told state lawmakers the agency had to settle. He said an agreement signed in 2011 between Duke and the administration of then-Gov. Bev Perdue left the state little choice because it said North Carolina would not fine Duke for violations as long as the utility was working to fix them.

"Once this memo became public, the (Attorney General's) Office, who was representing us in this case, said, you have to settle. If you don't settle, you'll get zero if you take this to court, because this is a get out of jail free card for Duke. So we settled. We had no choice but to settle," Reeder told lawmakers at a January 16th oversight panel meeting.

Ridgeway's ruling came on the same day the state issued its first permit to allow Duke Energy to drain coal ash ponds. Federal officials had to weigh in on the process, which involves pulling water out of the ponds before closing them. The permit applies to the Riverbend site in Gaston County, but the process could serve as a template for other locations across North Carolina.