By Suzanne Herel and Ted Caddell
Duke Energy said Friday that it had reached a $102.2 million settlement with the federal government to end the investigation into the Dan River ash spill and the company’s ash basin operations at other North Carolina plants.
News of the proposed settlement, which must still be approved by a U.S. District Court judge, came hours after federal prosecutors filed misdemeanor criminal charges against the company for illegal ash pond discharges throughout the state.
The investigation began following the February 2014 spill of up to 39 million tons of ash into the Dan River.
‘We are Accountable’
“We are accountable for what happened at Dan River and have learned from this event,” said CEO Lynn Good in a prepared statement Friday. Good mentioned the pending settlement during an earnings call on Wednesday.
Under the terms of the settlement, Duke will pay $68.2 million in fines and restitution and $34 million for community service and mitigation. The settlement calls for the $102.2 million to be borne by company shareholders, not ratepayers. The company’s fourth-quarter results included a charge of 14 cents per share to cover the settlement.
The full terms of the settlement will be released if it is approved by the court.
Good said the investigation was a catalyst to strengthen Duke’s ash management practices and to speed up its ash basin closures.
She also said the company expects to spend $1.3 billion to excavate and close five sites: Asheville, Dan River, Riverbend and Sutton in North Carolina, and W.S. Lee in South Carolina.
The Duke incident led North Carolina legislators to impose stricter rules on how coal ash storage sites can be operated.
In December, the Environmental Protection Agency issued the first-ever federal regulations governing the storage and use of coal ash, a byproduct of burning coal. There are an estimated 1,000 coal ash storage sites in the U.S., primarily under the control of electric generating companies. The industry produces about 140 million tons of coal ash per year.
Earnings Down
On Wednesday, the Charlotte, N.C.-based company reported fourth-quarter earnings of $97 million ($0.14/ share), compared with $688 million ($0.97/share) a year earlier. Year-end earnings were $1.88 billion ($2.66/share), down from $2.67 billion ($3.76/share) in 2013.
Duke said the results for its regulated utility business were affected by higher operation and maintenance costs due to a change in the accounting treatment of nuclear plant outages in the Carolinas. Meanwhile, its nonregulated businesses were impacted by Duke Energy International’s lower earnings, which resulted from a widespread drought in Brazil.
International Operations to Remain
Duke said Wednesday that it has decided to retain the international affiliate, which it had said last year it was considering selling.
The company said it plans to repatriate $2.7 billion in DEI earnings to the U.S. through 2022 through a taxable dividend.
DEI owns, operates or has substantial interests in approximately 4,900 MW of electric generation outside the U.S., primarily in Latin America.