WILMINGTON — When Duke Energy agreed last year to clean up and permanently close its nine remaining coal-ash basins in North Carolina, what it did not agree to was paying for it.
The issue of who will pick up the tab became clearer Monday when Attorney General Josh Stein announced that his office and two other parties had reached a settlement with Duke that, if approved, would see the power company’s shareholders pick up about 25% of the cleanup costs incurred from 2015 through 2030. Under a previous order, the state agency that approves how much utilities can charge had given Duke permission to pass along the entire cost — estimated at $9 billion — to its customers through rate increases.
The question of who will ultimately pay for cleaning up those nine sites — as well as similar work already done or underway elsewhere, including Wilmington’s Sutton Plant — has been hotly contested since 2014, when 39,000 tons of toxic ash spilled from a Duke storage pond in Eden and contaminated 70 miles of the Dan River.
In 2017, the N.C. Utilities Commission approved Duke’s request that essentially allowed the Charlotte-based company to pass along the cost to its customers. The only cost Duke shareholders were responsible for was a $100 million state penalty for the spills.
Stein, along with the Sierra Club and the Utilities Commission’s Public Staff (an independent agency charged with representing the interest of utility customers) challenged the decision and ultimately ended up appealing to the N.C. Supreme Court in 2018. In a ruling issued in December, the court offered a mixed opinion, upholding portions of the Utilities Commission’s order that allowed Duke to pass along the cost to its customers, and sending some issues back to the commission for further consideration.
Monday’s settlement, which still needs the approval of the Utilities Commission, would effectively end in the dispute. In a Monday morning news conference, Stein said the deal will save the state’s Duke Energy customers more than $1 billion on their utility bills over the next 10 years.
“I have long held that North Carolinians should not bear the full cost of cleaning up coal ash,” Stein said in a statement.
Duke Energy benefits from the agreement by having a better grasp of the cost of the work.
“We were able to reach a balanced compromise that will deliver immediate and long-term savings to customers and provide greater certainty to the company over the next decade,” Stephen De May, Duke Energy’s North Carolina president, said in a statement issued Monday.
The settlement will reduce coal ash costs included in the pending rate requests by 60%, according to Duke Energy officials, and would provide immediate customer savings.
The coal ash was produced over the years at power plants that generated electricity by burning coal in a boiler to produce steam. The leftover toxic ash usually was stored onsite in ponds, forming a toxic slurry of ash and water.
In 1954, Carolina Power & Light opened the coal-fired Sutton Plant, located off U.S. 421 just north of Wilmington and adjacent to the Cape Fear River. In 2011 Duke Energy purchased CP&L (known then as Progress Energy) and in 2013 the coal-based units were taken offline and replaced with a natural-gas-based facility.
Although the coal-burning units were gone, 7.2 million tons of coal ash remained, stored over the years in two basins at the facility. In 2015, Duke began a four-year project to remove the coal ash and close the basins. Initially the ash was transported by rail to Chatham County, where it was disposed of in a former clay mine.
In 2017 Duke Energy opened a lined landfill at the Sutton Plant and the remaining coal ash was moved there. The landfill cells are capped and the facility was designed to withstand a category 3 hurricane.
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