Duke Energy alleges breach of contract against insurance companies over coal ash coverage

D uke Energy is threatening to sue 30 insurance companies over allegations that they are refusing to cover the utility’s claims to clean up its coal ash sites. The notice of complaint for breach of contract was filed in state Superior Court today; the venue is Mecklenburg County, where Duke Energy Carolinas is headquartered.

The utility has said the cost of the cleanups so far is at least $725 million. Some of that cost could be passed along to Duke Energy customers when the utility requests a rate increase within the next year. The price tag for the ongoing cleanup could reach $4.5 billion.

The utility says its policies with the insurance companies, some of them internationally based, are supposed to cover its liabilities related to the coal ash cleanup. All premiums have been paid, Duke writes in the filing, and is “entitled to full benefits and protections of the policies.”

The insurance companies, the complaint goes on, have either refused to pay or not responded to Duke’s claims for coverage.

Duke is asking the court to force the companies to provide coverage, pay its claims, plus interest and attorney’s fees. The utility is also requesting a jury trial if the case is not resolved.

The Coal Ash Management Act requires excavation and dewatering of coal ash impoundments at seven of Duke’s plants: Dan River, Riverbend, Asheville, Sutton, Lee, Cape Fear and Weatherspoon. Last year, the legislature amended CAMA to require the utility to provide alternate water supplies to communities that are on private wells within a half-mile of the impoundments.

Duke also faces other liabilities over alleged environmental damage that could require the utility to restore groundwater and install technology to control any lingering contamination.

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