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Duke Energy Customers Won't Be Charged $1.1B For Coal-Ash Cleanup After NC Settlement

dan river coal ash cleanup
David Boraks
Workers loaded coal ash onto train cars at the Dan River plant in Eden in this 2016 file photo.

Duke Energy, North Carolina officials and the Sierra Club announced Monday an agreement on how the utility pays to get rid of coal ash stored in the state.

The agreement was announced a month after the state Supreme Court ruled regulators should revisit an order that would have placed nearly all of the expense upon the Charlotte-based energy giant's 3.4 million electric customers in the state.

The settlement takes off $1.1 billion from what customers would pay toward Duke’s estimated $4 billion effort to clean up its coal ash sites in North Carolina. It covers costs for cleanup Duke has done since 2015, and future costs through 2030. Coal ash is a toxic byproduct of burning coal for energy, and Duke has been involved in many lawsuits over how to clean up its coal ash and on what timeline.

The utility settled with the Department of Environmental Quality at the end of 2019 over the cleanup of six sites. Across all of its coal ash sites in North Carolina and South Carolina, Duke Energy estimates coal ash cleanup will cost between $8 billion and 9 billion through 2038.

Stein was part of Monday’s settlement, along with customer advocates at the North Carolina Utilities Commission and the Sierra Club. It’s not clear yet how much an average person would save from the settlement, but Stein said the settlement represents a win for Duke’s customers.

"What is certain is the part of a customer's utility bill that is attributable to cleaning up coal ash, will be substantially reduced as a result of this settlement," Stein said.

Duke spokesperson Meredith Archie said the settlement will reduce the coal ash cleanup part of Duke’s rate request by 60%. Duke Energy still has two cases before the Utilities Commission, which sets how much Duke can charge customers for power.

Stein appealed the utility’s request to raise rates in 2019, saying it shouldn’t force ratepayers to cover the full cost of Duke’s coal ash cleanup. He said that year’s rate increase due to coal ash costs will be rolled back because of this settlement.

What’s still not decided by the North Carolina Utilities Commission is how exactly Duke Energy, its shareholders, and customers will split the costs of the approximately $3 billion cleanup bill that remains. The $1.1 billion dollar settlement will now go before the Utilities Commission for approval.

A 2014 coal ash leak at a Duke Energy site into the Dan River prompted state officials to make the cleanup of these sites a priority.

Duke Energy pleaded guilty in 2015 to federal environmental crimes after an investigation found the company allowed coal ash dumps to leak into water supplies. The company agreed to pay $102 million in fines and restitution.

The utility has 7.7 million retail electric customers in six states and 1.6 million natural gas customers in five states.

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Updated: January 26, 2021 at 10:25 AM EST
Clarification: This story was updated to specify the name of the environmental group involved in the settlement, the Sierra Club.
Michael Falero is a radio reporter, currently covering voting and the 2020 election. He previously covered environment and energy for WFAE. Before joining WFAE in 2019, Michael worked as a producer for a number of local news podcasts based in Charlotte and Boston. He's a graduate of the Transom Story Workshop intensive on Cape Cod and UNC Chapel Hill.