Duke Energy subsidiaries plead guilty, sentenced for CWA violations

Three subsidiaries of Duke Energy Corporation have pleaded guilty to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68-million criminal fine and spend $34 million on environmental and land conservation projects.

WASHINGTON, DC, May 14, 2015 -- Today, three subsidiaries of Duke Energy Corporation, the largest utility in the United States, pleaded guilty to nine criminal violations of the Clean Water Act (CWA) at several of its North Carolina facilities and agreed to pay a $68-million criminal fine and spend $34 million on environmental and land conservation projects to benefit rivers and wetlands in North Carolina and Virginia.

Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near the city of Eden, N.C., in February 2014 (see: "Duke Energy NC coal ash spill signifies third largest in U.S. history"). The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies' other facilities. Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina -- all totaling approximately $3.4 billion.

Officials from the Environmental Protection Agency's (EPA) Office of Enforcement and Compliance Assurance, its Office of Inspector General, the Justice Department's Environment and Natural Resources Division, and the three U.S. Attorney's Offices in North Carolina, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, N.C., today.

On Feb. 20, 2015, the U.S. Attorney's Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging CWA violations at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County), and the Riverbend steam station (Gaston County). This included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.

As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc., will pay a $68-million criminal fine and a $24-million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia. The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins. In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.

Duke's subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited. Results of these audits will be made available to the public to ensure compliance with environmental laws and programs. The companies' compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.

See also:

"Duke Energy, U.S. government reach proposed agreement on NC coal plants"

"Duke Energy forms $10M Water Resources Fund for waterways in Carolinas, neighboring states"

###

More in Environmental