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Seeking rate increase, Duke Energy questions link between coal ash spill, coal ash bill

According to one of Duke Energy's top leaders, North Carolina's 2014 coal ash legislation didn't necessarily result from a company ash spill in the Dan River.

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By
Travis Fain
RALEIGH, N.C. — According to one of Duke Energy's top leaders, North Carolina's 2014 coal ash legislation didn't necessarily result from a company ash spill in the Dan River.

Federal coal ash rules were already being drafted at the time, and it's possible, Duke state President David Fountain testified Monday during a rate increase hearing, that the North Carolina General Assembly would have passed its law anyway.

Twice, Sierra Club attorney Matthew Quinn asked Fountain whether the law was motivated, or partially motivated, by a spill that turned parts of the river gray.

"I really can't admit that," Fountain replied.

State Rep. Pricey Harrison, D-Guilford, who saw her push for coal ash regulations gain traction only after the spill, scoffed at this Monday evening. When the bill passed in 2014, Senate negotiator Tom Apodaca specifically said that, "When I saw the Dan River thing, I said, 'We’ve got to do something.'" State Rep. Chuck McGrady, R-Henderson, who negotiated the bill for the House, told the Associated Press that, "unfortunately, sometimes we wait until we have a really big problem before we address it."

"It makes sense for (Fountain) to say that, but he is flat wrong," Harrison said Monday.

The question matters because part of Duke Energy Progress' rate hike request turns on whether shareholders or rate payers should pay the costs of cleaning up coal ash ponds as now required by law. One of the issues in the case is whether those costs were prudently incurred. The Sierra Club, among others, argues that storing hundreds of tons of toxic coal ash in unlined pits near water was not prudent.

Duke argues that it followed state and federal regulations at the time and that North Carolinians who benefited from the cheap electricity created by burning coal should now help bear the cost of regulations put in place long after ash pits were established. It's not seeking reimbursement of Dan River spill costs but the cost of cleaning up other pits around the state.

Fountain's testimony came on the opening day of North Carolina Utilities Commission hearing into how much Duke Energy Progress can raise rates in Wake County and other eastern parts of the state. A separate request from sister company Duke Energy Carolinas, which serves most of the state's western half, likely will be taken up next year.

Together, the two entities, both owned by Duke, have asked for more than $1 billion a year in new annual revenue.

Duke Energy Progress initially asked for a $17.80 monthly increase on the average residential ratepayer. That figure has come down as the company negotiated with the Public Staff – state attorneys tasked with representing consumers in these cases – but it's difficult to say by how much. Those two sides settled many of their issues in a filing last week, but others remain, including whether the company can raise an extra $183 million a year to cover coal ash cleanups.

There are also other parties to the case. A number of commercial entities fighting increases signed off on a settlement with the Duke Energy Progress on Monday, but environmental groups and attorneys representing low-income customers said they plan to push the case. Advocates for the poor are particularly concerned with a proposed hike in the utility's monthly base rate, paid regardless of how much electricity is used.

Duke Energy Progress once sought $19.50 a month for most residential customers. Its settlement with the Public Staff cut that back to $14. The current rate is $11.13.

The Utilities Commission, appointed to six-year terms by the governor and confirmed by the General Assembly, will eventually decide how much the regulated monopoly can charge and how much profit it should earn. It is unclear how long the case, which proceeds much like a trial, will take.

Fountain was also asked Monday about campaign donations his company makes through its political action committee.

"What are you trying to get out of making a contribution?" attorney John Runkle asked on behalf of NC WARN, an environmental advocacy group.

There are a variety of political dynamics in play at the state legislature, Fountain replied, and it's important that a balance of points of view are heard.

Do campaign donations bring better access to policy makers, Runkle followed up.

"It's important for there to be balanced points of view that are presented," Fountain replied.

Testimony continues in the case Tuesday morning at 9:30 at the Utilities Commission offices downtown.

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