Duke Energy Apologizes for Environmental Crimes, Will Pay $102 Million

Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pled guilty to nine criminal violations of the Clean Water Act at several of its North Carolina facilities.

The company and will pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia.



Duke Energy was represented by James Cooney of Womble Carlyle in Charlotte, North Carolina.

Under the plea agreements, Duke Energy was forced to take out ads in three North Carolina newspapers — Charlotte Observer, Raleigh News & Observer, and the Greensboro News & Record — and two national newspapers — USA Today and the Wall Street Journal.

The ads are titled — A Public Apology from Duke Energy.

“We are accountable for the spill and its aftermath and take responsibility for all of the violations contained in the plea agreement,” the ad reads. “We apologize to the communities that have been affected by these actions. We hope that others will learn from our experience.”

The Justice Department filed with the court a 79-page joint factual statement.

The Department also filed separate plea agreements for Duke Energy Progress, Duke Energy Business Services and Duke Energy Carolinas.

Also filed were separate judgments against Duke Energy Progress, Duke Energy Business Services and Duke Energy Carolinas.

Four of the criminal charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014.

The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.

Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.

Prosecutors said that Duke Energy refused to spend $20,000 on internal pipe inspections.

The inspections would have revealed that the pipe was made of 60-year-old corrugated metal, prosecutors said.

“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”

On February 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County).

The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.

As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia.

The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins.

In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.

Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited.

Results of these audits will be made available to the public to ensure compliance with environmental laws and programs.

The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.

Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina.

Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.

The holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.


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