Duke pleads guilty in federal court to environmental crimes, agrees to pay $102 million fine

IndustriesAssociated Press

Duke Energy pleaded guilty in federal court Thursday to environmental crimes and agreed to pay $102 million in fines and restitution for illegally discharging pollution 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. The nation's largest electricity company pleaded guilty to crimes involving coal-fired power plants in Eden, Moncure, Asheville, Goldsboro and Mt. Holly.

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Holding the company's plea agreement in his hand, Judge Malcolm Howard went through each one and asked if the company had engaged in these actions. Julia Janson, the company's chief legal officer, replied yes. Then the judge asked how Duke was pleading to each count. She replied softly, "Guilty."

After a short recess, Howard will sentence Duke in the afternoon.

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 pollution had been going back for years, to at least 2010.

In the court hearing, prosecutors gave multiple examples where Duke employees knew or were warned that they were discharging pollution into the state's waterways and they were slow to do anything or took no action at all.

At Dan River, officials at the plant requested $20,000 from company headquarters to use a camera to inspect four pipes, including the one that eventually collapsed, and another that was found leaking after the spill.

The company denied the request on two occasions, even after a top manager at the plant called to personally ask for the money to inspect the pipes.

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.

Duke said it would answer questions after the sentencing. But in a statement, the $50 billion Charlotte-based company said the hearing "officially closes a chapter in the company's history."

"We've used the Dan River incident as an opportunity to set a new, industry-leading standard for the management of coal ash. We are implementing innovative and sustainable closure solutions for all of our ash basins, building on the important steps we've taken over the past year to strengthen our operations. Our highest priority is to operate our system as safely as possible for the customers and communities we serve," the release said.

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.

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