In coal ash criminal proceedings, Duke Energy gets more time for plea hearing

Duke EnergyFor a short time this past week, it looked like Duke Energy’s negotiated plea agreements resolving coal ash-related federal criminal charges might be coming apart.

Under the agreements, as detailed by the company in a February 20 filing with the Securities and Exchange Commission, Duke Energy’s North Carolina subsidiaries would plead guilty to four Clean Water Act misdemeanors related to violations at Duke Energy Progress’ H.F. Lee Steam Electric Plant, Cape Fear Steam Electric Plant and Asheville Steam Electric Generating Plant, and five Act misdemeanors related to violations at Duke Energy Carolinas’ Dan River Steam Station and Riverbend Steam Station.

Together the companies would pay a total of $102 million in fines and penalties and for community service and mitigation expenses and serve five years of probation – during which time they would establish environmental compliance plans subject to the oversight of a court-appointed monitor.

Approval  of the agreements had been set by the United States District Court for the Eastern District of North Carolina for this Thursday, April 16 and, by all appearances  —  at least from the court records — the parties were on pace with that schedule.

Until April 6.

That’s when David Buente, a high profile environmental defense attorney with Sidley & Austin in Washington D.C. appeared as a new attorney on the Duke Energy team.

A day later Duke Energy asked the court for more time, filing motions to continue the April 16 plea and sentencing to a later date.

The reasons for the request remained a mystery, though, as the court had placed the motions under seal.

A new attorney and a request for a delay for undisclosed reasons cast the plea deal in doubt — until this morning, when U.S. District Judge Malcolm Howard entertained Duke Energy’s request in open court.

As it turned out, there was indeed a hitch in consummating the plea deal, though not nearly as dramatic as the build-up appeared.

Duke Energy wanted more time to wrap up administrative negotiations with the U.S. Environmental Protection Agency relating to the companies’ criminal pleas.

Under the principal of “debarment,” entities pleading guilty to a crime can be prohibited from doing business with the government.

In this case, according to Duke Energy, once the involved companies enter guilty pleas the facilities subject to the agreements could be barred from doing future business with the government.

The companies can get around that by persuading the EPA that they’ve satisfied the issues giving rise to the plea agreements and convincing the agency to waive debarment.

The government objected to Duke Energy’s request for more time, saying that the company knew for some time that it had to wrestle with the EPA over the issue.

“What about the lights going out at places like Fort Bragg,” Judge Howard asked – a scenario he alluded to as having been painted in Duke Energy’s motion.

Debarment is prospective only, Assistant U.S. Attorney Banu Rangarajan pointed out, and Fort Bragg’s contract doesn’t expire until September.

Plus, she added, military officials have the authority to override debarment.

In the end, Howard agreed to reset the plea and sentencing hearing for the court’s own reasons, saying that conditions of probation and other details still needed to be finalized.

Practically speaking, debarment might not have any teeth as a possible sanction when it comes to a regulated utility like Duke Energy that operates as a monopoly.

But getting a waiver of debarment was important for Duke Energy customers, spokeswoman Paige Sheehan said after the hearing, pointing out that getting service otherwise would become much more complicated.

“This is about getting certainly for our customers,” she said.

When asked what ultimate impact a ruling on debarment would have on the plea agreement, Sheehan said none.

“We’re not walking away from this agreement.”

Per this order, the court reset the plea and sentencing hearing for 10:00 a.m. on May 14, 2015 at the federal courthouse in Greenville, N.C.


Watchdog report highlights huge Duke Energy contributions to GOP guvs

The good people at Democracy NC released the following this morning:

Duke Energy Gives $3 Million to Committee Tied to Gov. Pat McCrory as He Guides Coal Ash Response

A new analysis of government records reveals that Duke Energy – the world’s largest private electric utility – began writing unusually large checks to the national Republican Governors Association while Gov. Pat McCrory and Republican lawmakers debated how to respond to the company’s giant spill of coal ash sludge into the Dan River.

In four payments from June to December 2014, Duke sent the Republican Governors Association a total of $3,050,000 – more than 10 times its previous record donation to the RGA. Duke’s contributions made it the top corporate donor to the RGA in 2014 and the second largest donor, behind the $3.5 million given by billionaire Sheldon Adelson, owner of the Las Vegas Sands.

In 2012, the RGA spent $5 million to boost the election of Pat McCrory as governor, and it is expected to be a major financial backer of his 2016 bid for reelection. Records show McCrory has attended numerous RGA events and helped the association raise funds.

“Duke Energy’s large donations raise questions about the governor’s ability to serve the public interest more than his own political interest,” said Bob Hall, executive director of the nonpartisan watchdog group Democracy North Carolina. “Critics say the coal ash regulation law passed in 2014 was too soft on Duke. Is this money the reason why?” Read more


New McCrory administration permits for Duke Energy include a massive loophole

The Fayetteville Observer has a fine editorial this morning taking the McCrory administration to task for the latest lame plan to deal with coal ash pollution and the ongoing discharges into our drinking water supplies. As the paper notes, the plan features a loophole the size of a coal fired power plant: it has no deadlines for compliance.

“Duke Energy was caught last year leaking excessive wastewater from its coal-ash ponds into soil and waterways. Duke is negotiating a federal settlement to pay resulting penalties. But the state Department of Environment and Natural Resources has found a way to ensure that the company doesn’t violate the law that way again: New permits will make future discharges legal….

…The logic behind DENR’s approach now is to give Duke time to fix these problems. Thinking the company could stop all leaks overnight would be unreasonable. If Duke works toward long-term solutions, DENR can offer permits letting the status quo remain legal temporarily without incurring additional penalties….

Unfortunately, there’s an element missing from DENR’s permitting plan that creates a massive loophole for continued pollution: There’s no timetable for Duke to make progress. That puts DENR’s policy back into the absurd category.

What good is a state agency that just writes permits allowing major polluters to continue doing more of the same indefinitely? Including a wish, even a vague expectation, that Duke will one day mend its ways doesn’t cut it. For Duke’s part, the company has expressed its intent to work toward rapid closure of the coal-ash ponds. If so, that’s great. But it won’t be due to any tough stance from DENR.

As the Southern Environmental Law Center, which sued Duke over coal-ash storage, has noted, DENR’s permit plan includes no interim steps that Duke must take to stay on track. The agency needs to rethink its handling of these permits, and work toward a policy with more teeth for working with Duke and other polluters in the future.”

Of course, what the Observer fails to note is that is that such loopholes are no accident; they are what you get when a once proud environmental protection agency is gradually hollowed out and transformed pursuant to the demands and directives of the state’s biggest corporate polluters.


Consumer/environmental advocates debunk Duke Energy’s anti-solar power claims

In case you missed it, the good folks at NC WARN are out with a new issue brief that takes Duke Energy to task for its latest efforts to derail the widespread deployment of solar power. As the release that accompanied the brief notes:

“The Duke claim…is that, as more customers put solar panels on rooftops, other customers are left to pay more than “their share” for Duke Energy’s large, expensive power plants.

But only because Duke is a protected monopoly can it try to force captive customers to pay a higher price for a product – polluting power – that others choose to replace with solar. It is grossly unfair to force customers, instead of corporate stockholders, to pay for poor decisions to build giant, expensive power plants as the national market swings toward cheaper, safer energy generated right at the home and workplace….

Every new rooftop solar system helps all customers by reducing Duke Energy’s case to keep building expensive power plants we don’t need and continually raising rates. Solar power provides energy during times of high demand – the hottest hours of the day – eliminating Duke’s argument for building more plants.

If Duke Energy cared about low-income customers, Read more


Updated: Criminal charges filed against Duke Energy in federal courts across the state

U.S. Attorney’s offices across the state filed a series of criminal cases today accusing Duke Energy of negligent discharge of coal ash and coal ash wastewater into rivers adjacent to company coal ash plants.

In Raleigh, the misdemeanor charges were filed in connection to spills at the H.F. Lee Steam Plant.

In Charlotte, similar charges were filed arising out of spills at the Riverbend and Asheville plants, according to the Charlotte Observer.

And in the state’s Middle District in Winston-Salem, charges were filed for negligent discharge at the Dan River Steam Station in  Eden and permitting and inspection violations at the Cape Fear Electric Steam Station in Moncure.

The charges follow Duke’s announcement earlier in the week of a possible $100 million settlement of the federal government’s investigation into spills at the plants.

In a statement released late yesterday, the company said that it had reached a proposed agreement with the federal government settling the charges that includes payments of $68.2 million in fines and restitution and $34 million for community service and mitigation — to be borne by shareholders, not customers.

The settlement agreement, which as of the time of this post has not been confirmed by the U.S. Attorney’s offices involved, must be approved by the court. 

It also does not resolve claims in pending civil cases arising out of coal ash spills and does not appear, per the Duke Energy statement, to provide specifically for clean up at each of the company’s plants in North Carolina.

In response to the announcement, Frank Holleman, an attorney with the Southern Environmental Law Center who represents several citizens groups in those pending actions, said in a statement:

Today, Duke Energy has admitted that it committed environmental crimes in its coal ash storage across North Carolina.  We informed Duke Energy and DENR of these violations of the Clean Water Act in 2013, yet Duke Energy’s polluting coal ash storage has yet to be cleaned up and has now resulted in criminal prosecutions.  The important points is this:  Duke Energy cannot buy its way out of its coal ash scandal, it has to clean its way out.  Duke Energy and its executives must show the people of North Carolina that they are sorry for these crimes by moving the dangerous and polluting coal ash to safe, dry, lined storage away from our rivers and drinking water supplies.

Read the Criminal Informations in the Raleigh cases below.

Duke Criminal 1 by NC Policy Watch

Duke Energy Criminal 2 by NC Policy Watch