Duke Energy (NYSE: DUK) announced it has appealed an unprecedented fine issued by the North Carolina Department of Environment and Natural Resources (NC DENR), arguing, among other things, that actions already taken by the company make the penalty unnecessary and excessive. Duke is asking that the fine be dismissed.
On March 10, 2015, the environmental regulator fined the company $25.1 million for groundwater violations at the retired, coal-fired L.V. Sutton Steam Electric Plant in Wilmington.
The appeal, filed with the North Carolina Office of Administrative Hearings, describes a number of instances where Duke believes NC DENR's actions violated state law, the regulator's own rules and procedures, public policy and the longstanding interpretation of the regulations, including:
- Fining the company for 1,822 days of alleged groundwater violations despite having sample results for just 27 days.
- Creating an entirely new methodology to calculate the fine that dramatically increased the size of the penalty, making it $24 million higher than similar fines issued by NC DENR.
- Failure to consider naturally occurring substances and other potential sources of groundwater contamination in the area.
"There are important legal issues here that must be resolved for the sake of everyone in North Carolina," said Paul Newton, state president – North Carolina. "At the same time, we remain focused on closing ash basins as quickly as the state process will allow, which ultimately addresses groundwater concerns."
Duke said it will close 32 ash basins across North Carolina, and has been working hard on plans to execute these closures. The work will begin at four facilities: Asheville, Dan River, Riverbend, and Sutton.
Ash can only be removed from the basins after the state issues new wastewater permits, for which the company applied in 2014. The first three of these permits are expected this summer.
Click here for a complete copy of Duke Energy's appeal.