Wednesday, July 17, 2024

Duke signs coal-ash settlement with ratepayers likely to pay the bulk

Duke Energy says it reached a settlement resolving the debate over how to pay for more than $8 billion of coal-ash management in the Carolinas, citing an agreement with N.C. Attorney General Josh Stein, the North Carolina Public Staff and Sierra Club. The various groups have been arguing over how much of the cost should be borne by the giant utility’s shareholders versus ratepayers.

The plan calls for ratepayers to pay the lion’s share of the costs, though less than the amount Duke had sought. The plan would reduce N.C. customers’ costs by about $1.1 billion between 2015 and 2030 compared with the company’s favored approach to recovering $4 billion in costs, Duke said. The company’s two subsidiaries that provide power in the Carolinas will each take a $500 million charge against earnings to account for the agreement.

The plan is being filed today with the N.C. Utilities Commission, which will make the final decision.

The settlement calls for reducing the costs that Duke is citing in its pending rate cases by 60%, which would lead to customer savings if approved, the company said. Duke said the plan allows it to earn a return on its investment in coal-ash remediation as it transitions to cleaner energy sources.

Duke has said that the cleanup will cost at least $8 billion. The N.C. Supreme Court ruled in December that the utility didn’t have to bear the full costs. But the court also found the commission erred in rejecting a plan to split the cost of cleanup between ratepayers and shareholders and extend the timeline for paying off the costs.

The N.C. Public Staff, which represents ratepayers, agreed that the settlement is much less than it had previously sought from Duke, Executive Director Chris Ayres told the Charlotte Business Journal. He said the deal was in line with a coal-ash decision involving Dominion Energy North Carolina last year.

“This agreement addresses a shared interest in putting the coal-ash debate to rest as we work toward building the cleaner energy future North Carolinians want and deserve,” Stephen De May, Duke Energy’s North Carolina president, said in a statement. “We were able to reach a balanced compromise that will deliver immediate and long-term savings to customers and provide greater certainty to the company over the next decade.”

Duke is closing coal ash basins in the state with the settlement affirming that the current closure strategy remains in the best interests of customers and communities in the Carolinas, the company said.

Duke pleaded guilty in 2015 to criminal violations of the federal Clean Water Act for the discharge of coal ash following a massive spill in February 2014 at the company’s Dan River Steam Station in Eden. About 39,000 tons of coal ash and millions of gallons of wastewater spilled into the Dan River.

Coal ash is a waste product generated by coal-fired electric-power plants that contains materials including arsenic, chromium and mercury that can be hazardous to people and wildlife.

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