The federal government launched a criminal investigation into the North Carolina Department of Environment and Natural Resources (DENR) and Duke Energy after thousands of tons of coal ash spilled into the Dan River.
The subpoena, issued Feb. 10, requests the DENR appear before the Eastern District Court of North Carolina in Raleigh March 18.
The U.S. Attorney’s Office requested records from the DENR from 2000 up to the date of the spill.
Items mentioned include permit requests and permits issued to Duke Energy’s Dan River plant, inspection reports from Duke Energy’s Dan River facility, any documents concerning coal ash leaks at the Dan River facility, records of enforcement actions taken by the DENR against Duke Energy’s Dan River facility, press releases issued by the DENR surrounding the Feb. 2 leak, records of maintenance to the broken stormwater pipe that released the coal ash and any correspondence shared between Duke Energy and the DENR from 2000 up to Feb. 2, 2014.
In a statement, the DENR said it plans to give its full cooperation in the investigation. The department’s chief environmental lawyer will appear before a grand jury next month.
Duke Energy also received a subpoena related to the Dan River spill. In a company statement, Duke Energy said they plan to cooperate with the investigation. In regard to the Dan River spill, Paul Newton, president of Duke Energy in North Carolina, said the company takes full responsibility for the spill.
“We will do the right thing for the river and surrounding communities. We are accountable,” Newton said.
The exact charges have not been announced, but the hearing will likely focus on possible criminal collusion between Duke and the DENR to avoid federal regulation.
A pipe burst Feb. 2 at a Duke Energy coal-fired plant in Eden, N.C. The spill, which is the third largest in U.S. history, dumped enough toxic sludge to fill 73 Olympic-sized swimming pools. Duke Energy initially estimated 82,000 tons of coal ash leaked from the broken pipe, but lowered their estimate to 30,000-39,000 tons the following week.
Feb.13, as crews were working to contain the spill, another leaky pipe released 1,000 gallons of treated wastewater at the same site. Though state officials say the second spill poses no health risks to the surrounding communities, Duke Energy has five days to develop a plan to stop the leak.
The Division of Water Resources within the DENR is responsible for permitting, regulating and inspecting all 14 coal-fired power plants in North Carolina in compliance with the U.S. Environmental Protection Agency’s standards.
After the Feb. 2 spill, the DENR released a statement saying contaminate levels were below state and federal clean water standards. However, upon review of the data, the department revised their statement. Follow up tests the week after the spill showed arsenic levels were four times higher than in samples taken the week before.
“The next step is working with other agencies and Duke Energy to coordinate a clean-up plan for the Dan River,” said DENR spokesman Drew Elliot. “We will be investigating what happened, why it happened and at that time we will explore any enforcement, penalties or other actions we might take against the utility.”
Environmental groups have criticized the state’s handling of the most recent coal ash spill, saying state officials are trying to downplay the severity of the spill and avoid holding Duke Energy accountable. Gov. Pat McCrory, who worked at Duke Energy for 28 years and holds at least $10,000 in company stock, has come under fire for shielding the company from complying with federal regulations.
As part of McCrory’s push to get more private sector officials into regulatory agencies, he appointed John Skvarla as secretary of the DENR last year. Skvarla previously served as CEO for Restoration Systems, an investment banking firm focused on environmental mitigation. Skvarla said he believes there is too much red tape in the DENR. In an interview with WRAL last year, Skvarla said he believed some rules in the DENR were over-regulating the utilities and he promised to take a customer service approach to operating the DENR.
The DENR’s mission statement says, “The DENR must always be a customer service-friendly organization, whether we’re issuing permits or educating citizens about recycling.”
Amy Adams, former regional director of the DENR in charge of enforcing surface water standards, said she resigned last November because she felt Skvarla was moving the DENR in the wrong direction.
“We have a governor right now that has very close ties to Duke, the state’s largest polluter and a major political contributor to his campaigns. Under the new administration, North Carolina has changed the definition of who its customer is from the public and natural resources it is supposed to protect to the industries it regulates,” Adams said. “There’s been a huge push away from environmental protection and toward promoting economic growth.”
Adams now works for Appalachian Voices, a nonprofit agency aimed at protecting natural resources in the Appalachian Mountains. Many other environmental groups have spoken out against the DENR’s relationship with Duke Energy.
Duke Energy and federal regulatory agencies have clashed in the past few years, with the state agency often siding with Duke Energy.
Groundwater monitoring from the Dan River plant in 2011 found dangerous levels of antimony and arsenic, both toxic. Though the high toxin levels were reported, the DENR took no action against Duke Energy. Six months before the Dan River spill, the state government announced that Duke Energy was in violation of the Clean Water Act for dumping pollution into the Dan River without a proper permit, but the agency did not take enforcement action.
“Duke Energy and the state of North Carolina have known about contamination from aging and dangerous coal ash storage pits for years, yet have taken no action to clean up the waste pits and protect our waterways and our people,” the Sierra Club said in a press release. “The DENR only filed an enforcement action against Duke’s unlawful coal ash pits after conservation advocates like the Sierra Club forced their hand. Even then, the DENR’s customer service approach would allow Duke Energy to continue business as usual.”
In the summer of 2013, the state blocked three civil suits that would have held Duke Energy accountable for previous coal ash pollution. Under the Clean Water Act, civil suits must give the polluter 60 days notice, and during this time period the DENR took on the lawsuits. The state then enacted the enforcement clause of the Clean Water Act, essentially blocking all future civil lawsuits against Duke Energy. In the case of a coal ash storage basin contaminating groundwater near Asheville, the DENR proposed a $99,111 fine against the $50 billion corporation and required increased monitoring of plant sites.
Environmental groups were not satisfied with the proposed settlement and said Duke Energy needs to be held accountable for cleaning up the pollution and reforming their coal ash storage methods.
Duke Energy and the DENR insist the settlement will work in the interest of the original coalition of environmentalist groups that brought the case against Duke Energy.
“All environmental groups that have asked to be involved in the suits against Duke Energy have been allowed to participate, so we do not oppose their intervention. They will have their say in the lawsuit,” Elliot said.
After the settlement proposal was announced, environmental groups were invited to provide their input. More than 5,000 people wrote letters against the proposal with only one person writing in support.
Feb. 10, the department told the judge to disregard their settlement after widespread criticism from environmental groups who believed the penalties were not stiff enough. Given the recent criminal investigation, the case against Duke Energy remains open.
“The DENR has been studying Duke Energy’s coal ash for years and has never taken action to enforce the law until conservation groups forced it to act,” said Frank Holleman, senior attorney for the Southern Environmental Law Center. “Now, instead of taking action to clean up the coal ash pollution and protect the public, the DENR is going back to the drawing board and proposing to delay action for who knows how long.”
Environmentalists and state regulatory agencies say Duke has been polluting waterways for years, but the groups disagree over the best way to hold Duke accountable and prevent further environmental damage.
“The DENR has been carefully monitoring our response to the Dan River events, and they have issued litigation,” said Lisa Hoffmann, spokesperson for Duke Energy. “We have a regulator-regulated relationship with the department, and the penalties imposed on Duke Energy for the Dan River spill are yet to be seen.”
Adams feels the customer service approach under Skvarla’s leadership goes beyond a regulator-regulated utility relationship.
“Giving industries extra room to violate regulations weakens DENR’s position. It’s like a get out of jail free card. Instead of maintaining a hard line and pursing violation of state law, Skvarla did not want the DENR to come across as tough,” Adams said. “He wants the DENR to partner with the industries, but they aren’t partners. We need to reinstate a regulator-regulated relationship.”