Duke Energy has a reputation for excellence. It has a market cap of $50.5 billion, employs 27,948 souls and provides power to six states in the American South and Midwest with a total service territory of 104,000 square miles. It is a Fortune 250 company and it was ranked 26th on the 2013 list of 100 Best Corporate Citizens, which assesses such areas as environment, climate change, human rights and philanthropy.
Since 2002 it has slid from the 46th to the 52nd most toxic air polluter in the United States. It now only releases 37.5 million pounds of toxic chemicals into the air per year.
It is the largest electric utility in the nation and is based in Charlotte, North Carolina. Today the state enjoys some of the lowest and most reliable electric rates in the South, well below the national average.
One of Duke Energy’s coal-fired plants is located in Eden, North Carolina. It was built in the 1940s and retired in 2012. Last February, two pipes ruptured underneath the ash pond that contains the plant’s byproduct. The ash spewed into the nearby Dan River, turning the water into a toxic sludge of mercury, lead, arsenic and other heavy metals. The river, which once provided drinking water to the towns of Danville and South Boston, Virginia, became so poisonous that it was unsafe to physically touch.
It is estimated that between 30,000 and 82,000 tons of coal ash contaminated the river, coating it for 70 miles and in some areas five feet deep. It is the third largest coal ash spill in U.S. history, described by North Carolina’s Department of Environmental and Natural Resources (DENR) as a full-on “environmental disaster.”
A Disaster That Could Have Been Prevented
Duke Energy retains 32 coal ash ponds in North Carolina. Before the Dan River spill, environmental groups shared water samples from nearby lakes and rivers with state regulators. These samples revealed that contamination was taking place, but no action was taken by the state.
In 2013, three attempts were made to force Duke to clean up its act. The first occurred in January. The Southern Environmental Law Center (SELC) singled out the pollution from Duke Energy’s Asheville Steam Generating Plant with the intention of suing in federal court. In accordance with The Clean Water Act, the SELC first notified state regulators by filing a notice of intent. Fifty-eight days later, North Carolina’s DENR filed notice that it would assert jurisdiction.
Under The Clean Water Act, state regulators have 60 days to take control of legal proceedings before a federal case can move forward.
On March 26, the SELC filed another notice of intent, this time to sue Duke’s Riverbend Steam Station, the location of another ash pond. Sixty days later, North Carolina asserted jurisdiction.
On June 19, the SELC filed a notice of intent for the Sutton Power Plant. This plant, too, had a pond that was contaminating the environment. Sixty days later, the DENR stepped in.
Each of Duke’s ash ponds and basins was subsequently sued by the state regulators. The final fine for its pollution was $99,111.
Environmentalists considered this number absurdly low. Consider, Duke Energy made a $2.7 billion profit last year.
According to Frank Holleman, senior attorney at SELC, “This is a common technique of regulators who are friendly with the law-breaking regulated entities. They will come in and file at the very last minute and then quickly propose a favorable settlement to the lawbreaker to prevent the citizens group from leading the litigation.”
How friendly is North Carolina to its gigantic, local utility?
Governor Pat McCrory Worked at Duke Energy for 29 Years
Patrick McCrory began his career with the Duke Energy Corporation in the late 1970s. He served Duke for almost three decades, “where he held top management positions in recruitment and staffing, management and professional training, and economic development and industrial recruitment.” Finance reports verify that McCrory’s 2012 election campaign was both directly and indirectly funded by Duke (through its political action committee, affiliated groups, employees and their family members), and he remains a shareholder in the company.
Since taking office, former Duke employees have been appointed to the governor’s cabinet, including State Commerce Secretary Sharon Decker.
Environmentalists believe that McCrory’s association with Duke may be coloring his behavior, perhaps shielding the utility from federal scrutiny. But McCrory is not the first governor beholden to Duke’s considerable largesse, and Duke does not discriminate by party lines. McCrory’s Democratic predecessor Bev Perdue received a $100,000 donation from Duke at each of his Cary and Charlotte fundraisers. In 2012, Duke Energy contributed $10 million for Charlotte’s Democratic National Convention.
Duke has been part and parcel of North Carolina for a long time.
What Is an Ash Pond?
Before we tread further into Duke’s environmental quagmire, it is important to understand its present environmental quagmires.
There are five sources of energy that power the United States: Petroleum, Natural Gas, Coal, Renewables and Nuclear Electric Power. Coal is primarily used in residential, commercial and industrial sectors and is responsible for 37 percent of total electricity generation in the country. (Petroleum remains the largest source of energy consumed in America but provides only 1 percent of electricity generation.)
Coal power plants produce a toxic ash byproduct that is dumped in open-air pits and waste ponds. Today there are over 1,100 such sites in America, primarily located on the eastern half of the country, that receive 140 million tons of coal ash every year. Duke Energy stores 106 million tons of ash in North Carolina alone, 84 million tons of which is dumped in waste ponds.
The Environmental Protection Agency has determined that these ponds are a severe health risk to anyone living nearby, comparable to smoking one pack of cigarettes per day. The toxins in the ash can cause disease, cancer, respiratory illness and nerve damage.
Duke Energy has been accused of ash seepage at 32 of its storage ponds.
Who’s Paying for This Mess?
Initially, George Everett, Duke’s Director of Environmental and Legislative Affairs, told North Carolina that Duke ratepayers would pay for the Dan River cleanup. Lynn Good, Duke’s CEO, has since informed the state that Duke will clean the river, but if North Carolina forces them to drain their ash pits, Duke customers will foot that bill.
This is because North Carolina allows its utilities to recoup the losses from its environmental compliance and operating costs. As Laura Leslie explains, this “means a utility’s ability to charge its costs back to customers in higher rates, rather than taking costs out of company profits, which would mean lower earnings for shareholders.” Last year, Duke’s earnings were up 25 percent.
This may have something to do with the fact that between 2008 and 2012, Duke Energy earned $9.02 billion, received $299 million in tax rebates and paid zero federal taxes.
State ratepayers can think about that while their electric bills soak up Duke’s toxic lagoons. The removal of just one dry ash landfill from South Carolina cost $24.5 million.
This article originally appeared on NationofChange.