Duke Energy coal ash cleanup cost recovery (North Carolina)
- The record does not name which of my species, waters, soils or forests were harmed.
Duke Energy's coal ash cleanup in North Carolina was estimated at $8 to 9 billion. Regulators allowed part of the cost to be recovered from customers, and a January 2021 settlement with the state attorney general kept about $1.1 billion off customer bills.
Utility Dive reported that most of the cleanup cost was passed to customers and that Duke earns a return on the remaining cost.
Status As of January 2021: the settlement with the North Carolina Attorney General kept about $1.1 billion of the $8-9 billion cleanup cost off customer bills; the record contains nothing later on cost recovery.
- Duke Energy — Earns an equity return on the remaining cleanup costs, at a lower rate than it proposed (January 2021 settlement). Utility Dive
- Duke Energy Progress customers — Fixed monthly charge raised 25% from $11.13 to $14 in February 2018; most of the cleanup cost was passed to customers, according to Utility Dive. Utility Dive
- Duke Energy — Penalty of $30 million for mismanagement (2018); about $1.1 billion not passed on to customers (2021). Utility Dive
What happened
Duke Energy, a US electric utility, is cleaning up coal ash held in unlined ponds in North Carolina. The cleanup plan was estimated at $8 to 9 billion as of the January 2021 settlement, and the record says Duke is excavating about 80 million tonnes of ash and moving it to lined storage.
In February 2018 the North Carolina Utilities Commission raised the fixed monthly charge for Duke Energy Progress customers from $11.13 to $14, an increase of 25%, which opened the way to recovering $232 million Duke had spent. The commission imposed a $30 million penalty for mismanagement. A Duke customer told the hearing in Charlotte that he could not pay the increase on his Social Security income.
In January 2021 Duke settled with the North Carolina Attorney General. Under the settlement Duke agreed not to pass on about $1.1 billion of the $8 to 9 billion plan to customers, and it keeps earning an equity return on the remaining cleanup costs, at a lower rate than it had proposed. Utility Dive's headline described the outcome as Duke profiting from the coal ash cleanup, and the same publication reported that most of the cost was passed to customers.
Separately, in March 2017 Duke sued about 30 insurers in North Carolina's Business Court over 57 general liability policies from the early 1970s to the mid-1980s, with a liability estimate of $5.1 billion and more than $725 million spent by November 2016. The insurers argued the damage was intentional and that Duke kept using unlined ponds after it knew of the problems. The court found on summary judgment that the insurers had not proved intentional damage at the Mayo plant. Duke reached 14 settlements with 23 insurers, the last in August 2021, and received about $418 million.
The record also gives a US-wide figure for 2022: 91% of plants with coal ash ponds (265 of 292) contaminated groundwater, and 4% (11) chose a cleanup plan that included treatment. The figure is not specific to Duke.
- 201729 March: Duke sues about 30 insurers in North Carolina's Business Court
- 201823 February: Utilities Commission raises Duke Energy Progress's fixed monthly charge by 25%, opening recovery of $232 million, and imposes a $30 million mismanagement penalty
- 2021January: settlement with the North Carolina Attorney General; about $1.1 billion of an $8-9 billion plan not passed on to customers. August: last insurer settlement; about $418 million received in total
What was said
“Duke continued to dispose of (coal ash) in unlined ash ponds long after it knew it had environmental problems”
Where accounts differ
Each party's account, side by side, with its source. The record does not settle these points; it shows them.
Raised Duke Energy Progress's fixed monthly charge by 25% to recover $232 million and imposed a $30 million mismanagement penalty (February 2018).
Said he could not pay the increase on his Social Security income.
Settled in January 2021, with Duke agreeing not to pass on about $1.1 billion of the plan.
Utility DiveReported a total cost of $8-9 billion and customer savings of $1.1 billion under the settlement.
NCLCV / WCCBReported that Duke would profit from the cleanup after the settlement and that most of the cost was passed to customers.
Utility DiveArgued the damage was intentional and that Duke kept using unlined ponds after it knew of environmental problems.
Indianapolis Business JournalFound on summary judgment that the insurers had not proved intentional damage at the Mayo plant.
Indianapolis Business JournalHow it looked
Shown
- The January 2021 settlement shifted about $1.1 billion in costs away from North Carolina customers.Utility Dive (headline) · Utility Dive
Recorded
- The Utilities Commission raised Duke Energy Progress's fixed monthly charge from $11.13 to $14 (25%) in February 2018, allowing recovery of $232 million, and imposed a $30 million mismanagement penalty.
- In January 2021 Duke agreed not to pass on about $1.1 billion of an $8-9 billion plan and keeps earning an equity return on the remaining costs at a lower rate than it proposed.
- Utility Dive reported that most of the $8-9 billion cleanup was passed to customers and that Duke earns a return.
- 91% of US plants with coal ash ponds (265 of 292) contaminated groundwater and 4% (11) chose a cleanup plan with treatment (2022, US-wide).
Who gained
Reached nature or the ground
Gained elsewhere
Responses on record
- Duke Energy (2021-01): Agreed in the January 2021 settlement not to pass on about $1.1 billion of the cleanup plan to customers. · Utility Dive
- North Carolina Utilities Commission (2018-02-23): Raised Duke Energy Progress's fixed monthly charge by 25% and imposed a $30 million mismanagement penalty.
In court and with insurers
Lawsuits and rulings
- 2018-02-23Claimant won$30000bn Penalty imposed on Duke for mismanagementDuke Energy Progress rate case (coal ash cost recovery and mismanagement penalty)North Carolina Utilities Commission · Regulatory · Duke Energy Progress → Not applicable (rate case)
The commission raised the fixed monthly charge from $11.13 to $14 (25%), opening recovery of $232 million, and imposed a $30 million penalty for mismanagement.
- 2021-01Settled$1100000bn Cleanup cost Duke agreed not to pass on to customers (about)Duke Energy coal ash settlement with the North Carolina Attorney GeneralSettlement with the North Carolina Attorney General · Administrative · State of North Carolina (Attorney General) → Duke Energy
Duke agreed not to pass on about $1.1 billion of the $8-9 billion plan and kept the right to earn an equity return on the remaining cleanup costs at a lower rate than it had proposed. Utility Dive
Insurers
- 2021Refused, paid after suit$418000bn Received in 14 settlements with 23 insurers (about)About 30 insurers, including AEGIS (Bermuda) → Duke EnergyStated reason: Insurers argued the damage was intentional, that there was no distinct pollution event and that Duke had made claims for the same ponds in the 1990s.
Duke sued about 30 insurers on 29 March 2017 over 57 policies from the early 1970s to mid-1980s, with a $5.1 billion liability estimate. AEGIS filed its own federal suit the same day, arguing it was too late to go to court. The court found the insurers had not proved intentional damage at the Mayo plant. Fourteen settlements with 23 insurers followed, the last in August 2021; two foreign insurers defaulted. Indianapolis Business Journal
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: The record holds no measurement of harm to nature.
Accounts
Record
- Disputed Sources differ on the shareholders' share: Utility Dive and NCLCV put the amount kept off customer bills at about $1.1 billion of the $8-9 billion plan, while an unverified summary says shareholders bear about three-quarters of the cost of the unlined ponds; the figures do not reconcile.
- Insufficient Reported but not independently verified: the 2017 Utilities Commission decision allowed all cleanup cost except a one-time $100 million environmental penalty to be charged to customers (a television station's summary only).
- Insufficient Reported but not independently verified: the North Carolina Supreme Court partially reversed the commission's decision in December 2020.
Did the harm stop?
The January 2021 settlement kept about $1.1 billion of the estimated $8-9 billion cleanup cost off customer bills. The record describes the excavation of ash to lined storage as under way.
Who paid?
Utility Dive reported that most of the $8-9 billion cleanup cost was passed to customers and that Duke earns a return on the remaining cost; about $1.1 billion was excluded from customer bills in the January 2021 settlement.
Sources
Press and investigations
- Duke to profit from coal ash cleanup after settling with North Carolina AGUtility Dive · 2021-01
- Insurers were off the hook: Duke Energy knew coal ash riskIndianapolis Business Journal · 2017
Communities and civil society
- Coal ash (NCLCV summary, via WCCB)NCLCV / WCCB · 2021-02
Connected cases
- Duke Energy coal ash insurance dispute United States · 2017–2021 Related matter
- Duke Energy (Company) — here: Utility cleaning up coal ash; seeks cost recovery; there: Policyholder and plaintiff; coal ash owner
- North Carolina Utilities Commission (Public authority) — here: Regulator; set rates and imposed a $30 million penalty (2018); there: State utility regulator; set cost recovery from customers
- US coal ash ponds, groundwater contamination and EPA delay United States · 2015–2026 Related matter
- Duke Energy (Company) — here: Utility cleaning up coal ash; seeks cost recovery; there: Utility; coal ash owner, claimant against insurers
- TVA Kingston coal ash spill insurance United States · 2008–2014 Related matter