Duke Energy flexes political muscle on fracked gas, coal ash


Illustration of the proposed Asheville gas plant via Duke Energy’s website.

Duke Energy is facing serious regulatory battles in its home state of North Carolina, with climate-action groups doggedly trying to block the company’s planned fracked gas plant in Asheville and the state’s environmental agency recently deciding — at least temporarily— that all of the company’s coal ash impoundments must be excavated and the waste moved to safer dry storage.

But the power giant is fighting back with the help of friends in high places.

On the gas plant front, Duke Energy earlier this month asked the N.C. Utilities Commission to order NC WARN and The Climate Times to post a $50 million bond to continue their appeal of the commission’s approval of the company’s proposed $1 billion gas plant on the site of a shuttered coal plant near Asheville, citing a never-before-used provision of a 1963 state law allowing the utility to seek a bond from critics challenging a power plant approval. Though the bond is supposed to offset costs stemming from a delay in starting construction, Duke Energy has not shown any evidence that the appeal would lead to delays.

The commission, where Duke Energy holds considerable influence thanks in part to appointments by Republican Gov. Pat McCrory, a former Duke Energy executive, rejected the $50 million bond requested by the company. But it ordered the environmental nonprofits to show they have assets to post a $10 million bond, what’s known as an “undertaking,” which they say is impossible. NC WARN’s annual income is just over $1 million, according to IRS filings, and The Climate Times is a new nonprofit incorporated last year by Harvard Ayers, a professor emeritus of anthropology at Appalachian State University in Boone, North Carolina.

“[I]t goes without saying that the Petitioners cannot afford a $10,000,000.00 bond or undertaking,” the groups stated in their request for a stay on the bond filed earlier this month with the N.C. Court of Appeals. “Thus, the Commission’s Bond Order is tantamount to dismissing any appeal of the [construction permit].”

This week, the appeals court denied the groups’ stay request. They now plan to file the appeal of both the plant’s construction approval and the bond order by the May 27 deadline. But they’ve raised concerns that the same commissioners whose pro-Duke ruling is being appealed are allowed to set a bond in the case at an amount that effectively blocks the ruling’s appeal.

NC WARN and The Climate Times point to the unprecedented bond requirement as an example of how the utilities commission shields Duke Energy from close scrutiny. The groups warn that the company’s plans to build up to 15 large gas-fired plants in the Carolinas alone would be disastrous for the climate because of the fracking industry’s documented problem with leaking methane, a potent greenhouse gas. They also argue that Duke would end up building unneeded power plants that would raise consumer rates.

Under a state law fast-tracking the project sponsored by retiring state Sen. Tom Apodaca, a Henderson Republican and Western North Carolina’s most powerful state lawmaker, the commission approved the Asheville plant in just 45 days, raising questions about how thoroughly it was considered.

“You would think a billion-dollar decision needs more than 45 days for review,” NC WARN attorney John Runkle told Facing South. “This is a steamroll.”

Letting Duke Energy off the hook on coal ash?

Meanwhile, environmentalists are blasting a surprise bill moving quicklythrough the Republican-controlled General Assembly that could weaken plans recently unveiled by the McCrory administration to require Duke Energy to clean up its more than 30 leaking coal ash pits across the state.

Introduced last year to address terms for the state’s Rules Review Commission, Senate Bill 71 was rewritten to focus on coal ash and brought up for consideration this week. The bill has some provisions environmentalists like, such as requiring Duke Energy to provide piped water or filtration systems to owners of coal ash-contaminated wells. It also reconstitutes and tweaks membership on the state’s Coal Ash Management Commission in an attempt to satisfy the state Supreme Court’s ruling that the group had been created unconstitutionally.

But controversially, the measure would change current plans for cleaning up coal ash impoundments. Last week, the state Department of Environmental Quality released ratings for existing impoundments, designating them all as either medium or high risk, meaning that under a state law passed after Duke’s Dan River coal ash spill the waste would have to be excavated and moved to safer lined landfills, a more costly solution than simply capping the ash in place. However, DEQ also allowed the classifications to be revisited in 18 months, giving Duke Energy time to strengthen dams or take other steps that would make the impoundments less risky.

Environmentalists weren’t completely happy with the DEQ plan, particularly the provision to revisit the classifications. The Southern Environmental Law Center (SELC), which is representing a dozen groups in a lawsuit seeking to force Duke Energy to clean up its coal ash pits, said the provision “allows Governor McCrory’s administration to say one thing to get through the election this fall, all subject to revision after the election.”

But they’re concerned that the legislature’s coal ash plan provides too many concessions to Duke Energy, with the N.C. League of Conservation Voters criticizing the bill as a “sweetheart deal.” Among other things, the legislation would have the classifications of the coal ash pits go to the Coal Ash Management Commission for review and either final approval or revision. McCrory has vowed to veto the bill in its present form, but lawmakers say they think they have the votes for an override.

“This bill is the latest attempt by Raleigh politicians to bail out Duke Energy,” said Frank Holleman, a senior attorney with SELC. “Citizens and communities across North Carolina followed the rules set out in the Coal Ash Management Act over a year and half ago. Under the existing law, after extensive public comments, DEQ was forced to conclude that Duke Energy must remove its coal ash from its dangerous and leaking pits across the state. Now, after heavy lobbying by Duke Energy, the Raleigh politicians want to re-open the process to try to find a way to let Duke Energy off the hook.”

Duke Energy is among the most powerful political forces in the state, with a team of top-rated lobbyists and a generous political giving program. From 2013 through 2016, the company’s political action committee spent over $578,000 on North Carolina elections, according to the National Institute on Money in State Politics. In the first quarter of this year alone, it made over $200,000 in contributions to state legislative candidates.

May 26, 2016
Sue Sturgis


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    By: Sue Sturgis (Facing South)

    Sue joined the Institute in November 2005 as director of Gulf Coast Reconstruction Watch, a project to document and investigate the post-Katrina recovery. A former staff writer for The News & Observer in Raleigh, North Carolina, and the Independent Weekly in Durham, North Carolina, Sue directs and writes for the Institute’s online magazine, Facing South, with a focus on energy and environmental issues. She was the first journalist to be awarded the North Carolina League of Conservation Voters’ Catalyst Award for her commitment to educating the public about important environmental issues.

    Sue has authored or co-authored numerous Institute reports, including “Life After BP” (2011), “Faith in the Gulf” (2008), “Hurricane Katrina and the Guiding Principles on Internal Displacement” (2008) and “Blueprint for Gulf Renewal” (2007). Her work has also appeared in other publications including The American Prospect, The Progressive, and Salon. Sue holds a master’s degree in journalism from New York University and a bachelor’s in social work from Penn State.

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