May 14, 2015
Duke Energy Subsidiaries Plead Guilty and Sentenced for
Clean Water Act Crimes. The companies will pay a fine and conduct community
service and wetlands mitigation.
WASHINGTON – Three subsidiaries of North Carolina-based
Duke Energy Corporation, the largest utility in the United States, pleaded
guilty today to nine criminal violations of the Clean Water Act at several of
its North Carolina facilities and agreed to 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. Four of the 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.
Officials from the Environmental Protection Agency’s
Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector
General, the Justice Department’s Environment and Natural Resources Division
and the three U.S. Attorney’s Offices in North Carolina, the Internal Revenue
Service (IRS) Criminal Investigations and the North Carolina State Bureau of
Investigation (SBI) made the announcement following a plea hearing at the
federal courthouse in Greenville, North Carolina today.
“Over two hundred sixteen million Americans rely on
surface water as their source of drinking water. Duke Energy put that precious
resource at risk in North Carolina as the result of their negligence,” said
Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and
Compliance Assurance. “Companies that cut corners and contaminate waters on
which communities depend, as Duke did here, will be held accountable.”
“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.”
“Duke Energy's crimes reflect a breach of the public
trust and a lack of stewardship for the natural resources belonging to all of
the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the
Eastern District of North Carolina. “The
massive release at the Dan River coal ash basin revealed criminal misconduct
throughout the state -- conduct that will no longer be tolerated under the
Judgment imposed by the court today.”
On Feb. 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 companies must also meet the obligations imposed
under federal and state law to excavate and close coal ash impoundments at the
Asheville, Dan River, Riverbend, and Sutton facilities.
Additionally, at the insistence of the United States, 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.
The criminal investigation was conducted by the EPA-CID,
EPA-Region 4, EPA-OIG, IRS-CI and NC SBI with assistance from the F B I and the
Department of Defense Criminal Investigative Service.
