Key lawmakers say coal ash cleanup should not raise rates

Duke Power executives have said they could ask consumers to pay the cost of cleaning up coal ash ponds across North Carolina. Lawmakers say they would look at ways to avoid that.

Posted 8:04 p.m. Mar 12, 2014 — Updated 8:20 p.m. Mar 12, 2014

Mark Binker

RALEIGH, N.C. — Some key lawmakers say they are unhappy with the prospect of Duke Energy raising rates to pay for the cleanup of coal ash ponds across North Carolina.

"My objective is to keep it off the ratepayers," said Rep. Mike Hager, R-Rutherford, a co-chairman of the legislature's Environmental Review Commission and the state House Committee on Public Utilities.

Coal ash, the toxin-laced mixture left over after coal is burned for fuel, became a front-and-center environmental issue for the state when a Duke coal ash storage pond spilled up to 40,000 gallons of the stuff in the Dan River near Eden last month. The company has 14 locations throughout the state where coal ash is stored in unlined ponds like the one in Eden.

Duke has consistently said shareholders and the company's insurers would bear the cost of cleaning up the actual spill and the damage it did. Chief Executive Lynn Good, however, said last week that the company would turn to ratepayers to help cover the cost of permanently cleaning up all of its ash ponds in North Carolina. That is consistent with her remarks during a conference call with stock analysts in February.

Many of the ash ponds have been shown to be leaking contaminants into local groundwater supplies.

Top-ranking lawmakers said early on they would push through bills that would require Duke to clean up the ponds. Left unsaid in those early conversations was who would pay for the cleanup.

Gov. Pat McCrory has said that he wants to "keep politics out" of the decision-making process and has declined to say what he thinks the company should do. Duke officials are scheduled to deliver their plans for dealing with the ponds to state regulators by Saturday.

However, lawmakers interviewed Wednesday said they were unhappy with the idea that electric rates could go up in order to pay for the cleanup.

"I've got people in Spindale who still live in mill houses, and they can't take another increase on their rates," Hager said. "A power rate increase is the most regressive tax you can have."

Right now, the decision over whether the company could seek a rate increase to pay for the cleanup rests with the North Carolina Utilities Commission, a body appointed by the governor. However, the legislature could direct the commission to do particular things.

Hager said the final solution might involve giving the company some "relief in other areas" that would save it money and have it use those savings to conduct the cleanup. He could not be specific on what "relief" the state might provide.

The legislature's Environmental Review Commission met Wednesday but did not take up any coal ash-related matters.

The ERC conducts oversight hearings and drafts legislation for the full General Assembly to consider. Rep. Ruth Samuelson, R-Mecklenburg, said ERC could hold a special meeting just on coal ash, if warranted, before the session begins on May 14.

Rep. Pricey Harrison, D-Guilford, who has worked on coal ash-related bills for years, said that recent court actions may have given the state the ability to direct the company to clean up its coal ash ponds. However, she, too, worried about whether consumers would pick up the cost.

Coal ash ponds are unlined. Short of spills, they have allowed contaminants like mercury and arsenic to leach into groundwater supplies.

"From my perspective, that's an irresponsible way to store waste product, and Duke should have known better all along," Harrison said.

Democrats plan to hold a news conference Thursday to lay out what they think should be in any coal ash bill that moves through the General Assembly.

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