Guilty as Charged: Duke Energy to Pay Record Fine for Coal Ash Crimes

Duke Energy pleaded guilty on Thursday to environmental crimes and has agreed to pay a record $102 million in fines and restitution for years of illegal pollution, ignored warnings, and poorly maintained infrastructure.

U.S. District Court Judge Malcolm Howard said it is the largest federal criminal fine in North Carolina history.

But some environmentalists insist the punishment is insufficient, given the damage Duke continues to wreak in local communities. Just last month, the company was forced to start delivering bottled water to people with tainted wells close to several of its coal ash pits.

Of the $102 million, $68 million is a criminal penalty assessed under the federal Clean Water Act--believed to be among the largest such fines under the 43-year-old law. The rest of the settlement will go toward environmental projects in North Carolina and Virginia. The company will also be placed on a five-year probation, under which it will be monitored for compliance with the Clean Water Act. If it violates the law while on probation, Duke could be subject to further action by the court.

"Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable."
--Cynthia Giles, EPA

"Today we said that big companies will be held accountable," declared U.S. Attorney Thomas Walker of Raleigh, whose office convened the grand jury that led to Duke's guilty pleas to nine misdemeanors. According to Walker's office, four of the charges are the direct result of the massive 2014 coal ash spill into the Dan River near Eden, North Carolina. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies' other facilities.

Still, as Southern Environmental Law Center senior attorney John Suttles pointed out, "What this admission of guilt does not do is clean up the coal ash that continues to leak into our water supplies, into our rivers."

In February 2014, 39,000 tons of coal ash--a toxic waste product generated by coal-fired electric power plants--spilled into the Dan River, coating the waterway and contaminating the ecosystem. Prosecutors said Duke, which in 2014 earned $1.4 billion as the largest energy utility in the nation, twice refused to spend $20,000 on internal pipe inspections in the years before the devastating accident. Those inspections, prosecutors charged, would have revealed that the pipe was made of 60-year-old corrugated metal, not the concrete that Duke engineers supposed.

"They should have been monitoring better, they should have been fixing what they saw, they should have been listening to their employees," Assistant Attorney General John C. Cruden, who supervises the prosecution of environmental crimes at the U.S. Justice Department, told the Associated Press. "If they had done that, the spill we saw would not have occurred."

What's more, according to Raleigh's News & Observer, Duke agreed in court filings that for years it failed to act on other recommendations to monitor pipes for leakage from the ash ponds.

"Over two hundred sixteen million Americans rely on surface water as their source of drinking water," said Assistant Administrator Cynthia Giles for the Environmental Protection Agency's Office of Enforcement and Compliance Assurance. "Duke Energy put that precious resource at risk in North Carolina as the result of their negligence. Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable."

The News & Observer adds:

While the pleas resolve the federal criminal charges against Duke, government officials pointedly did not declare the coal ash investigation over.

Walker's subpoenas also went to 18 past or current officials of the state Department of Environment and Natural Resources, although none have been charged.

The settlement also doesn't resolve state investigations. Duke is fighting a $25 million state fine levied in March for contamination at the Sutton power plant in Wilmington. The state has also cited Duke for violations at its Asheville plant but has not issued a fine.

Duke also faces more than a dozen lawsuits over ash contamination filed by North Carolina and advocacy groups, and six shareholder suits claiming company officers and directors placed Duke at financial risk.

Corporate crime reporter Russell Mokhiber talked about Duke's fine in his "Morning Minute" podcast on Friday, which you can listen to below: