Duke Energy (NYSE: DUK) announced March 24 that it will vigorously contest an unprecedented civil penalty issued by North Carolina environmental regulators related to the coal-fired L.V. Sutton Steam Electric Plant in Wilmington.
On March 10, the North Carolina Department of Environment and Natural Resources (NC DENR) fined Duke Energy $25.1 million for groundwater violations at the Wilmington facility.
“This is a difficult step, but we cannot allow this level of regulatory overreach to go unchallenged,” said Paul Newton, state president–North Carolina. “The actions by NC DENR send a chilling message to the North Carolina business community.”
The company will file a formal appeal with the North Carolina Office of Administrative Hearings by April 9 demonstrating the specific instances where it believes NC DENR acted contrary to law, exceeded its authority or jurisdiction, and didn’t follow proper rules and procedures.
“We take very seriously our responsibility to care for the communities around our facilities. That’s why we monitored groundwater at the Sutton plant, routinely shared data with the state, and voluntarily acted to ensure local residents continue to have a high-quality water supply,” said Newton. “Our work has been proactive and focused on the well-being of the community. We took accountability and addressed the issue at Sutton ourselves.
He added: “We are as committed as ever to closing ash basins in ways that protect groundwater. We will continue to advance those plans while we sort through this separate legal issue.”
In 2013, monitoring data indicated that groundwater near the Sutton plant was starting to move in the direction of the Flemington community, which gets its water from Cape Fear Public Utility Authority (CFPUA) wells near the plant. The water supply is safe and continues to meet federal and state drinking water standards, with a margin of safety, and there is no health risk to the residents, Duke said. Duke Energy initiated a partnership with CFPUA to fund the extension of a municipal water line to the area, eliminating the need for public drinking wells. That project will be completed in less than two years, well before groundwater impacts would reach the public water supply, the company said.
Duke will close 32 coal ash basins across North Carolina, and has been working hard on plans to execute these closures. The work will begin at four facilities: Asheville, Dan River, Riverbend, and Sutton. Ash can only be removed from the basins after the state issues new wastewater permits, for which the company applied in 2014. The first three of these permits are expected in early summer, with the rest of them following in late summer and fall.
“We are doing all we know to work constructively with NC DENR to meet North Carolina’s aggressive deadlines to close ash basins,” said Newton. “It is essential the state move quickly to support this important work.”
NC DENR fined the utility a record $25,116,883.61 based on the extent of impacts to groundwater, the characteristics of the constituents causing the impacts and the duration of the violations. The calculation for the fine incorporated the state’s investigative costs and a formula taken from state groundwater laws that allows fines to be assessed by multiplying the number of days an individual contaminant leached into groundwater by a civil penalty for each violation, the department said. State groundwater violations at other Duke Energy facilities could result in additional fines against the utility, it added.
“Today’s enforcement action continues the aggressive approach this administration has taken on coal ash,” said DENR Secretary Donald R. van der Vaart in a March 10 statement. “In addition to holding the utility accountable for past contamination we have found across the state, we are also moving expeditiously to remove the threat to our waterways and groundwater from coal ash ponds statewide.”