When things get too cozy – the travails of Duke Energy and DENR

I have been a customer and shareholder of Duke Energy for over thirty years. I have also been a North Carolina taxpayer for the same length of time. For the most part, Duke Energy has been a good company and recognized as such in its industry. Yet it has had a few moments when it got involved with some accounting irregularities in South Carolina and it bought into the gas transmission industry before it exited it with much egg on its face. With that context, I want to share my disappointment in Duke on the coal ash spill that could have been avoided along with their response. I also want to add that criticism of too cozy a relationship between Duke, the NC Department of Energy and Natural Resources (DENR) and our governor is well placed.

As many of you know, Duke Energy is responsible for coal ash leaks on the North Carolina and Virginia border which have spilled coal ash into the Dan River. The “Dan” provides water to several communities in Rockingham County, which ironically is the seat of the Senate Leader in NC, Phil Berger. Rightfully so, Senator Berger has expressed outrage at Duke and their failure to notify people timely and their poor response.  However, the senator is also responsible for helping defang the environmental protections in our state and promoting fracking with an industry loaded committee to study the issue, so he has contributed to our lackluster environmental protection.

Duke is concerned about fixing the problem, but what troubles me is the issue of the coal ash ponds in our state was raised by several environmental groups last year in a lawsuit. They shared many concerns over the dozens of coal ash ponds, but the DENR decided to make it easier by consolidating the lawsuits into one and then settling with Duke for a fine of $99,000 and a commitment to clean things up on Duke’s timetable. That number is correct – a Fortune 500 company was fined the amount of $99,000, which cannot even count as being a slap on the wrist. As of this post, DENR has been sued by the Environmental Protection Agency and copies of emails have been requested to discern any foul play.

I would be remiss if I did not mention that our governor, Pat McCrory was an employee of Duke Energy before winning the governor’s race. However, this cozy relationship has been fairly cozy for some time, predating McCrory’s tenure. But, under the guise of reducing so-called burdensome regulations on industry, the environmental restrictions have been greatly loosened in our state, especially the past three years. Our General Assembly has passed some questionable legislation as well as considering rolling back a requirement to do more alternative energy, before it was beaten back when they realized late how successful the solar energy industry has been here. The Speaker of the House, Thom Tillis, noted his surprise that NC was the 5th most prolific solar energy state in the country at the time.

As a Duke shareholder, I have sent two emails to the previous and current CEOs about cleaning up the coal ash ponds. The first one was last spring to Jim Rogers and the second one was this past week to Lynn Good, the new CEO.  She came out in the paper saying the clean-up of the Dan River spill is on Duke (shareholders) while the clean up of other coal ash ponds will be on the customers. This last statement has not sat well with customers. Good is thinking too much like she was still in her old job of CFO and not like someone whose company screwed up and people were harmed. I understand her rationale, but by failing to act last year, Duke threw away the last shred of goodwill on this subject. The governor is banging on the lid of a trash can now, but he is a little behind on the issue in most people’s minds, as well.

Duke Energy, you are better than this. You have done some nice things in alternative energy and shut down some coal plants. That is good and you should be commended. Now, do the right thing and clean up the ponds before the next accident. Do what you should have done last year when you were apprised of the concerns. You should also be thinking about more creative ways to pay for this and not place the lion’s share of the burden on customers. And, please continue decommissioning the coal-fired plants as you have been doing. We need to divorce ourselves from coal at a faster clip as there is no such thing as clean coal and it does not get cleaner sitting in a coal ash pond.

I would also encourage you to link to a much more thorough post in Amaya’s blog called The Brabble Rabble.  Amaya includes greater detail about the defanging of the DENR and other environmental groups in North Carolina. Here is a link: http://thebrabblerabble.wordpress.com/2014/03/12/politics-north-carolina-style-coal-ash-pollutes-nc-waters-as-regulatory-body-endures-job-and-funding-cuts-duke-energy-promises-to-pass-clean-up-costs-on-to-customers/#comment-2251

9 thoughts on “When things get too cozy – the travails of Duke Energy and DENR

    • Many thanks. The ash from the burned coal is crated off to these pits which are usually near water. The reason is to keep the coal ash wet, to prevent it from blowing away along with its toxic residue. The problem occurs when the ash leaks into the water stream. TVA had a terrible spill in 2008, I think, that got every one’s attention. In Duke’s case, the spill was from a closed down facility. Their first mistake was not knowing the kind of piping which was underneath the pond, which rusted and gave way. Two other leaks occurred after this first one.

      So, when people use the term “clean coal” it is a misnomer. It is a cleaner process, but is not clean as you have to get it our of the ground and dispose of residual ash. Duke is closing down old coal plants and either replacing them with a cleaner coal process or using natural gas which burns cleaner, but has a host of other problems.

      I hope this helps. Thanks for your time, BTG

      • Thank you very much. I had no idea. I feel bad for all of you affected by this nasty business; and wonder why companies are not proactive, instead of reactive. It just seems fair to the planet and all who dwell on it to take care of it before there is a problem.

      • Plus, proactive usually costs less than reactive, especially when you factor in the bad PR. Yet, this is our nature to push problems off.

  1. Well done. I like the fact based approach to what happened and whats happening now. I, too am a shareholder, and was enamored with Duke’s commitment to closing down coal and working towards gas and solar. I can’t imagine what group of MBA’s ran their spreadsheets and came up with Duke’s recommended solutions. You are right in that they need to be proactive, not reactive. No one will ever forget Johnson & Johnsons proactive work with the Tylenol scare in the ’80’s (Though they are a far different, non-proactive company, today) and all the positive PR and business increase they got from that act. Duke needs to do the same.

    Thanks for a great post and explanation of whats going on. NC is not looking good on the national stage these days, are they.

    • Thanks Barney. Johnson & Johnson did do the right thing and was aided by its great reputation. I am sorry to hear that J&J’s reputation has waned. Duke has slowly degraded its stellar reputation over the past twenty years, so they have less goodwill to bank on. They are getting significant push back right now. And, we are not advertising well for new business with our mishaps in NC. I keep telling the legislators that, but the current leadership thinks they are doing a great jobs and it just these “activists” that are finding fault with them. Thanks again for your comments. BTG

  2. Pingback: Politics, North Carolina Style. Coal Ash Pollutes NC Waters as Regulatory Body Endures Job and Funding Cuts: Duke Energy Promises to Pass Clean-up Costs on To Customers! | BrabbleRabble

  3. Note to Readers: I posted this editorial cartoon from Kevin Siers of The Charlotte Observer dated 3/13/2014 on The Brabble Rabble post on the same subject. Please read Amaya’s post as it is very well done. This is in response to the NC governor complaining about people making his and the DENR’s failure to oversee Duke Energy about politics. Yet, as the cartoon notes, it has always been about politics. http://www.charlotteobserver.com/kevin_siers/

  4. Note to readers: The Charlotte Observer had an excellent piece today which shows the amount of water related fines declining measurably the last two years from around $1.8 million per annum to around $500,000 under the tutelage of the GOP led General Assembly. It has even got worse since the Governor McCrory took office. A key member of the DENR resigned last fall and she cited the lack of senior support for going after polluters. At some point, citizens have to tell leaders to quit peeing in their pool.

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