Duke Energy Officials Plead Guilty to Environmental Crimes

coal_ashGREENVILLE, N.C. — Duke Energy has pleaded guilty in federal court to environmental crimes and has agreed to pay $102 million in fines and restitution over years of illegal pollution leaking from coal-ash dumps at five North Carolina power plants.

The company’s plea to nine misdemeanor counts involving violations of the Clean Water Act was part of a negotiated settlement with federal prosecutors.

Prosecutors say the nation’s largest electricity company engaged in unlawful dumping at coal-fired power plants in Eden, Moncure, Asheville, Goldsboro and Mt. Holly.

The investigation into Duke began last February after a pipe collapsed under a coal ash dump at the Eden plant, coating 70 miles of the Dan River in gray sludge. However, prosecutors said that Duke’s illegal dumping had been going back for years, to at least 2010.

Duke has said in statements and court filings that the costs of the settlement will be borne by its shareholders, not passed on to its electricity customers.

Environmental groups hailed the charges as vindication for their years of efforts to get regulators to hold Duke accountable for the pollution leaking from 32 coal ash dumps at 14 power plants scattered across the state. The ash, which is the waste left behind when coal is burned to generate electricity, contains such toxic heavy metals as arsenic, selenium, chromium and mercury.

The Associated Press reported last year that environmental groups tried three times in 2013 to sue Duke under the Clean Water Act to force the company to clean up its leaky coal ash dumps. The groups said they were forced to sue after North Carolina regulators failed to act on evidence conservationists gathered of ongoing groundwater contamination at Duke’s dumps.

But each time, N.C. Department of Environment and Natural Resources blocked the citizen lawsuits by intervening at the last minute to assert its own authority under the act to take enforcement action in state court.

The administration of Gov. Pat McCrory, a Republican who worked at Duke for 29 years, then proposed what environmentalists derided as a “sweetheart deal” under which the Charlotte-based company worth more than $50 billion would have paid fines of just $99,111 to settle violations over toxic groundwater leeching from two of its plants. That agreement, which included no requirement that Duke immediately stop or clean up the pollution, was pulled amid intense criticism after the Dan River spill.

– Associated Press


As State Fracking Law Takes Effect, Business Interest Fades

frackingCHARLOTTE– So far, it’s been a slow start to North Carolina’s fracking industry.

The governor said the legislation would create more than 1,000 jobs when he signed the legislation last year. Environmentalists said it would spur pollution and hurt the environment.

At this point, neither is right, because companies aren’t interested right now.

When he signed the fracking bill last year, Gov. Pat McCrory trumpeted a soon-to-be roaring drilling industry.

“We’re going to unleash the resources of North Carolina and produce jobs in North Carolina, and help our country become energy independent,” he said at a June 2014 news conference.

But his roar is turning out to be more of a whimper.

According to the North Carolina Department of Environment and Natural Resources, not a single group has applied for a drilling permit since the moratorium was officially lifted in March.

Wells Fargo Securities Energy Analyst Ross Payne says it’s about economics.

“Natural gas prices have been down about 42 percent year over year, kind of following what we’ve seen on the oil side, which is down over 50 percent,” he said.

Payne says we’re oversupplied on gas. That makes new gas an unattractive investment.

“As a result, we’re going to see both oil and natural gas production start to plateau, and the next step is probably down somewhat,” said Payne.

Several companies, including WhitMar drilling out of Colorado, have mineral leases around Lee County.

Whitmar says they’re now letting those leases expire. Officials in the county say interest has dried up.

Ross says that could change as the United States gets into natural gas exports two years from now.

“We’ll probably start to see a stability of production, and potentially an increase as exports start to ramp up,” he said.

Even if gas prices rise, companies say there’s more gas in states like Pennsylvania, where they already have infrastructure to get it out of the ground, on the road, and to the consumer.

The stagnation in North Carolina hasn’t been free. The state spent an undetermined amount of money on the fracking push, spending untold amounts on man hours and field studies, which turned into a 484 page report.

If things do turn around, the boom might be short-lived anyway.

A 2012 U.S. Geological Survey study says Tar Heel gas would only last about 5.6 years.

Ross says further exploration could find more, though that may not happen if prices stay low.

Time Warner Cable News tried to contact the original bill sponsor, Sen. Bob Rucho. He did not respond. The governor’s office also did not immediately respond.

Duke Energy says they plan to use more natural gas in the future, but they’re looking toward a pipeline to import gas from other states, instead of using North Carolina-produced natural gas.

A spokesperson for the N.C. Department of Environment and Natural Resources released the following statement:

A total of $650,000 has been allocated to the state to study the potential for oil and gas exploration activities in North Carolina since 2011. Here’s a breakdown of the money allocated to the state since 2011:  

Study ($100,000)

The General Assembly allocated $100,000 to DENR for a study of shale gas and oil exploration in 2011. DENR conducted the eight-month study of the potential environmental, social and economic impacts of shale gas exploration and development in North Carolina. This study was directed by Session Law 2011-276, which required DENR to study the issue of oil and gas exploration in the state and focus on the use of horizontal drilling and hydraulic fracturing to extract shale gas. Some of the money for the study went to the U.S. Geological Survey to support their efforts to identify private water wells in the Lee and Chatham counties. About $20,000 was for specific tests on cores and rock samples from the Deep River and Dan River basins.

Test drilling ($550,000)

The General Assembly allocated DENR $300,000 in fiscal 2013-14 and $250,000 in fiscal 2014-15 to obtain new information about the potential for oil and gas exploration in the Deep River, Cumberland-Marlboro basin and Dan River basin. Test drilling is planned in the next few months for the Dan and Cumberland-Marlboro basins. With the test drilling, DENR will try to determine the existence of oil and gas and what the potential is for those resources. The state has sufficient information about the potential for oil and gas resources in the Deep River basin.   

Duke Energy Executive Compensation Cut Over Coal Ash Spill

duke_energy_ceoCHARLOTTE — Duke Energy’s CEO paid a price for the coal ash spill that coated 70 miles of a North Carolina river in sludge.

An annual statement released ahead of the company’s May shareholder meeting says CEO Lynn Good’s $8.3 million compensation in 2014 was cut by close to $600,000.

The top financial officer and three other executives saw similar reductions in compensation tied to annual performance.

Representatives with Duke Energy say the executives were docked because the spill will cost the company more than $190 million in cleanup and legal fees, and fines.

NC Republican Senators Offering Quick Gas Tax Cut

RALEIGH—Some state Republican senators want to offer a quick gas tax cut.

Members of the Senate Finance Committee are planning to  consider a bill on Tuesday to lower the gas tax from 37.5 cents a gallon to 35 cents on March 1. North Carolina’s gas tax was just increased on Jan.1 to where it stands now.

That adjustment was the current process that re-assesses where the tax should be twice a year.

Under a proposal that was unveiled Tuesday morning in a Senate committee, the tax would be lowered, but once it is reduced, it could not ever be reduced any further.

State lawmakers say their proposal to cut to the current gas tax will give transportation officials more predictability in how much money will be coming in for projects.

The move comes as lawmakers are expected to consider a proposal from the governor take out a $1.2 billion bond to help pay for new transportation projects. Some lawmakers say they like the idea of not allowing the tax to dip- but say perhaps the immediate lowering is not needed.

“Given the increased demands, in fact seem to be overwhelming demand on the highway fund, as well as the trust fund, why can’t we just freeze and stabilize this tax rather than cutting it,” said Sen. Dan Blue.

The legislation is proposing to make this change as of March 1. Bill sponsors say in order to move the proposal through the full legislature quickly enough with the support it needs, the cut needs to be in the bill.

But some advocates say this proposal is a bad idea.

“It appears to be a bait and switch where we are telling tax payers that they are getting a tax cut.  But it is actually keeping the rate artificially high where it could drop six to eight cents over the next year, it is going to keep it locked at 35 cents,” said Donald Bryson with Americans for Prosperity.

This bill is scheduled to move through the Senate within the next day or two and then move over to the House for consideration.

NC Senators Push For Offshore Energy Exploration

RALEIGH – Sens. Thom Tillis and Richard Burr are proposing a plan to allow the federal government to get energy sources from North Carolina’s coast.

The Atlantic Outer Continental Shelf Access and Revenue Share Act of 2015 will allow it to open up natural gas and oil reserves off the Atlantic Coast. Tillis says the development of natural gas would create 55,000 jobs in the state by 2035 and generate $4 billion in royalty revenue.

He says it will also preserve the coastline by prohibiting any energy exploration within 30 miles of the nearest shore.

Gas Tax To Hit Cap on Jan. 1, 9th Highest in Nation

RALEIGH — With the start of the new year is a start of the new tax rate for gas in North Carolina. The tax is adjusted twice a year and to kick off 2015, the rate will hit its cap of 37.5 cents, making it the ninth highest in the country.

By all accounts, the price at the pump across the country has been remarkably palatable over the past weeks and months. But the biannual gas tax evaluation based on a wholesale gas and diesel price for the previous six months, mandates an increase of one cent for January through June. Under a 2013 state law that 37.5 cent tax is the maximum the state can charge.

“As we are sitting here gas prices are still coming down, oil prices are still coming down,” says Mike Walden, an economist with NC State University. “So as gas taxes go up, if the price for gas taxes is going down, it is not going to be as big of a hit.”

But state leaders point out, the gas tax is not as effective as it used to be. As cars become more efficient, they use less gas. Less gas means less tax dollars for the state. Less tax dollars, means less money for transportation projects.

“Increasingly it has become obvious that this is not sufficient to pay for our road needs,” says Walden. “So at some point, I think we will have to bite that bullet and think about how are we going to pay for our road needs in the 21st century.”

State leaders have recently worked to create efficiencies within the Department of Transportation. But unlike many other states, North Carolina relies heavily on the gas tax for transit needs. That means even with the tax reaching its ceiling, state lawmakers say that doesn’t mean cuts are on the horizon.

“I would love to say the first act is going to be to cut the gas tax,” says Rep. David Lewis, a Harnett County Republican. “But I think I would be being dishonest if I said that. I think we have serious transportation needs in this state.”

North Carolina’s gas tax is set to be re-evaluated again on July first. At the same time, the current cap of 37.5 cents is set to expire.

– Loretta Boniti

Duke anxiously waiting on EPA coal ash regulations

CHARLOTTE—The same kind of public outcry which led to a new coal ash law in Raleigh is pushing changes in Washington this month.

“Unfortunately, coal ash is not an issue that you can solve that quickly,” said Duke Energy spokesperson Paige Sheehan.

The EPA has been weighing new rules for more than four years now. They’re due next week.

Sheehan said they could play into Duke’s coal ash plan, estimated at its highest to cost $8 billion.

“That will trigger, possibly, some changes within our company in terms of how we manage coal ash and how we close ash basins,” Sheehan said.

The rules are expected to add coal ash to the 20-year-old Solid Waste Disposal Act, and decide whether to label it as “special waste.”

That classification dictates how companies label, store, transport and report on certain wastes. The EPA could add other restrictions which they’re not yet releasing.

“It will be huge. Typically these rules are several hundreds of pages long,” Sheehan said, “But North Carolina is already in great shape, because we’re already closing our 32 ash basins and identifying ways to safely store that material for the long term.”

Duke has plans to move and repurpose some ash pending state approval. But environmentalists hope the EPA better regulates how that’s done.

“You know, however you use it, we just want to make sure that the ash and everything it contains, all the metals and other chemicals, that those are locked up and this will not leech out,” Catawba Riverkeeper Sam Perkins said.

He said he understands the challenges of moving 100 million tons of ash, but he’s pushing for quicker action. His organization says they’re still finding toxic chemicals near sites like the Buck Steam Station.

“Where these are right now, they’re unlined, they’re leaking, and they’re susceptible to a disaster like we saw at Dan River because they’re so close to waterways,” said Perkins.

Duke is still waiting to hear back from the state on their plans. They’re presenting to a state commission Wednesday. The EPA’s rules are due out Friday after next.

– Andrew Sorensen

US Agriculture Secretary Vilsack Visits NC Solar Company

BUNN, N.C–On Thursday, U.S. Agriculture Secretary Tom Vilsack visited a Franklin County farm that produces solar-powered electricity to announce money flowing to renewable energy projects.

Vilsack visited Progress Solar in Bunn in conjunction with a White House campaign about investments in solar power.

He announced that the USDA is investing in 540 renewable energy projects in US including nearly two-dozen in North Carolina.

Progress Solar received a $3 million loan guarantee two years ago to install an array of solar-power panels. The government said the operation now produces enough solar energy to power 600 homes a year.

The Agriculture Department has given more than $275 million in grants and $260 million in loan guarantees to farms and rural small business owners during President Barack Obama’s term in office.

NC Supreme Court to Hear Cases on Duke Energy Rate Hikes

RALEIGH – The North Carolina Supreme Court is set to hear arguments in another two cases Monday regarding Duke Energy rate hikes.

The cases stem from 2011 and 2013 when Attorney General Roy Cooper and the North Carolina Waste Awareness and Reduction Network, or NC WARN, appealed orders that allowed increases by the North Carolina Utilities Commission.

They say the commission did not adequately considered how Duke Energy’s guaranteed profit would impact customers.

Each case represents an increase that’s under $7 a month for residential customers in the western part of the state, with Duke Energy Carolina.

But together that’s an increase of nearly $13 a month.

“What the goal is to find out something that’s not discriminatory and looks at within a year’s time how much electricity, energy, the different customer classes are using,” said John Runkle of NC WARN.

“The company has no choice but to build its system so that it has enough electricity to all of its customers when demand its at its highest…Black outs and brown outs are not an option for the utility,” said Christopher Browning, Duke Energy.

Last month, the court upheld a 5.5 percent rate hike by Duke Energy in 2013.

Duke Energy says most of the rate increase will pay for new power plants. NC WARN argues those power plants mainly serve industrial companies that use energy.

They say the cost burden falls on the customer.

– Linnie Supall

Duke Energy, Partners to Build 550-Mile Natural Gas Pipeline

CHARLOTTE—Duke Energy and Piedmont Natural Gas announced they will partner with Dominion to build a 550-mile natural gas pipeline expanding from West Virginia to North Carolina.

The project will be known as the “Atlantic Coast Pipeline” and has an estimated cost of between $4.5 billion and $5 billion. It is expected to be completed in 2018 but still needs approval from the Federal Energy Regulatory Commission.

The partnership with Dominion was selected after Duke Energy and Piedmont reviewed proposals from five different companies to build the second major interstate natural gas pipeline in North Carolina.

Pipeline route:

• Begin in Harrison County, West Va.

• Travel southeast through four other West Virginia counties and 13 Virginia counties

• A separate, 70-mile extension pipeline will split off from the main pipeline at the Virginia-North Carolina border

• In North Carolina, the pipeline will enter the state in Northampton County, travel southwest through six other counties, then end in Robeson County at existing Piedmont Natural Gas transmission facilities.

The pipeline will serve six utilities including Duke Energy, Piedmont Natural Gas and PSNC Energy.