Duke Energy was in a bind.
Carolina regulators had for years allowed the nation's largest power
company to pollute the ground near its plants without penalty. But in
early 2013, a coalition of environmental groups sued to force Duke to clean up nearly three dozen leaky coal ash dumps spread across the state.
So last summer, Duke Energy turned to North Carolina lawmakers for help.
Documents and interviews collected by The Associated Press show how Duke's
lobbyists prodded Republican legislators to tuck a 330-word provision
in a regulatory reform bill running nearly 60 single-spaced pages.
Though the bill never once mentions coal ash, the change allowed Duke
to avoid any costly cleanup of contaminated groundwater leaching from
its unlined dumps toward rivers, lakes and the drinking wells of nearby
Passed overwhelmingly by the GOP-controlled
legislature, the bill was signed into law by Gov. Pat McCrory, a
pro-business Republican who worked at Duke for 28 years.
decades, Democrats have stifled small businesses and job creators with
undue bureaucratic burden and red tape,” McCrory said at the time. “This
common-sense legislation cuts government red tape, axes overly
burdensome regulations, and puts job creation first here in North
Environmentalists saw the legislation, and its little-noticed provision benefiting Duke, differently.
sweeping change gutted North Carolina's groundwater law,” recounts D.J.
Gerken, a senior attorney for the Southern Environmental Law Center.
The level of coordination between Duke and North Carolina's lawmakers and regulators had long been of concern to environmentalists. But when a Duke
dump ruptured on Feb. 2 — spewing enough coal ash to coat 70 miles of
the Dan River with toxic sludge — the issue took on new urgency.
Federal prosecutors have launched a criminal investigation into the spill, issuing at least 23 grand jury subpoenas to Duke executives and state officials.
first batch of subpoenas were issued the day after an AP story raised
questions about whether North Carolina regulators had helped shield Duke
from a coalition of environmental groups that wanted to sue under the
U.S. Clean Water Act to force the company to clean up its coal ash
Still, regulators alone could not protect the company
from its huge liability if the environmental groups persevered in court.
So Duke officials lobbied — successfully — to change state law, itself.
Their vehicle was the Regulatory Reform Act. And they took aim at a provision that had been on the books for decades, requiring Duke to halt the source of contamination if its subterranean plumes of pollution crept more than 500 feet from its ash dumps.
Carolina's 14 coal-fired plants have 33 waste pits. Each is surrounded
by a “compliance boundary,” with monitoring wells tracking the spread of
A compliance boundary is like an early
warning system. If groundwater contamination inside the line exceeds
state environmental standards, a company is supposed to take corrective
action. The goal is to stop the spread of pollution to neighboring
properties, as well as rivers and streams.
But that wasn't happening. Instead of enforcing the limit, state officials were letting Duke
continue to pollute groundwater inside its compliance boundaries around
old ash pits without taking any action to stop the contamination. At
some plants, regulators even let Duke redraw
its compliance boundaries when it looked like contamination might cross
the line — a stalling tactic to avoid the cost of cleanup.
Data collected from Duke's
own monitoring wells showed contamination beyond that 500-foot limit at
several of its properties, with high levels of arsenic, selenium, lead
and other poisonous contaminants found in coal ash.
examining results from test wells at the ash sites, the Southern
Environmental Law Center found that many exceeded state water-quality
standards. Lawyers believed state officials were interpreting
regulations to allow the company to profit rather than protect public
health and the environment.
On behalf of Cape Fear River Watch,
the Sierra Club, Waterkeeper Alliance and the Western North Carolina
Alliance, the law center asked the state Environmental Management
Commission to instruct the state to “interpret the groundwater
protection rules as they were written.”
The environmental groups
wanted the commission to order regulators to force coal-ash operators to
take immediate corrective action when toxic chemicals in groundwater
exceeded state water quality standards at or beyond the compliance
The commission ruled against them, so the environmental groups appealed in state court.
That's when Duke's lobbyists began reaching out to lawmakers.
George Everett, the director of environmental and legislative affairs for Duke, said the company wanted the law changed to “be consistent with the rules.”
“We advocated for the same position that the agency has used for 30 years,” he told The AP.
took control of North Carolina's legislature in 2010 for the first time
since Reconstruction and cemented full control of state government with
the inauguration of McCrory as governor last year. That put them in
prime position to implement an ardently pro-business, anti-regulation
In talks with conservative legislators, Duke's lobbyists framed its problem as a property rights issue.
Chuck McGrady, one of only two Republican members of the state House to
vote against the final version of the bill, recalls talking with Duke's lobbyists about the change in the groundwater contamination rules.
said it was a fairness issue, that they shouldn't be held responsible
for the migration of pollution on their own site, that whatever costs
they would need to bear should be in direct relationship of the
migration of that pollution off their sites,” said McGrady, whose
Henderson County district borders some of Duke's dumps
closely with lawmakers, the lobbyists helped craft a provision to
conform to the way state regulators had been interpreting the law. The
change would allow Duke to contaminate groundwater until it crossed onto a neighbor's property.
and its executives have donated millions in recent years to both
Republicans and Democrats. Though 2013 was not an election year, records
show the company continued to give generously as its lobbyists sought
to protect its ash pits.
A political action committee underwritten by Duke
employees sent another $95,000 to Republican legislators and groups
that support their campaigns — nearly five times the amount provided to
North Carolina's Democratic legislators over the same time period
Tim D. Moffitt, an Asheville Republican who chairs the House Regulatory
Reform Committee that crafted the bill, got a $4,000 check, the maximum
contribution allowed by state law. Asked this month how Duke's provision was inserted, Moffitt said he had no idea.
Other GOP leaders interviewed by the AP also said they had no knowledge about who inserted the change.
Duke spokesman Thomas Williams said the company doesn't discuss its lobbying activities for specific legislation.
PAC has supported both parties over the years, some years the Democrats
receive more than the Republicans and vice versa,” he said.
McCrory spokesman Josh Ellis insisted that the change in the law didn't change anything at all.
right: The compliance boundaries are still in the same place, but only
because the state environmental agency has not yet drafted new rules to
comply with the new law, as required.
“They are pretending that
the law had nothing to say about the compliance boundary moving,” said
Gerken, the environmental lawyer. “They're wrong. It directed DENR to
change the rules to be consistent with the law.”
He said the
provision dramatically altered the way the state is supposed to monitor
groundwater violations, including eliminating a mandate to clean up
contamination inside the compliance boundary.
“The reason for the
compliance boundary is there is no magic switch you can flip to stop
groundwater from migrating. So once it reaches the property line it is
going to cross the property line,” he said.
The effect of the change in the law played out earlier this month in a North Carolina courtroom.
a March 6 ruling, Wake County Superior Court Judge Paul Ridgeway found
that last year's lawsuit filed by environmentalists seeking to require
the state to enforce the 500-foot contamination limit is now moot —
citing the Regulatory Reform Act that became law in August.
Another section of the new law gave the state's blessing to another way for Duke to avoid liability for pollution: It could buy up residential properties abutting its leaky dumps.
Even before the new law passed, this gambit already had been put into practice.
bought land near the Lee Steam Electric Station along the Neuse River
in 2012 to extend the compliance boundary to the east, said Susan
Massengale of the state Department of Environment and Natural Resources.
And the company tried to buy neighboring land at its Cliffside Steam
Station along the Broad River.
Records show that Progress Energy, which was acquired by Duke
in a 2012 mega-merger, bought five acres adjacent to its coal-fired
power plant near Asheville for about $1.1 million — a price tag far
below what it would have cost to clean out its leaking coal ash pits.
that additional property has been purchased which results in a slight
shift of the compliance boundary,” plant manager Garry Whisnant wrote to
As a result, groundwater monitoring wells in
the old compliance boundary would no longer be used, Whisnant said.
Instead, the company wanted to build two wells on the new property.
The land is in the Lake Julian Trails community, a cluster of townhomes downhill from an ash pit.
was just part of the unfinished development that had not had any homes
on it yet,” said Linnea Dallman, former president of the Lake Julian
At first, residents weren't sure why the
power company wanted the property. But they became suspicious when
workers put up a black fence to seal off the land and posted
Janet Casperson, the mother of a 2-month-old
girl, said she's worried. She and her husband moved in the house in
February, 2011, getting a really good deal on a new townhouse along a
quiet cul de sac. They knew about the ash dump when they moved in, but
they weren't that concerned — until recently.
Over the last year, Casperson watched workers collect soil samples from her neighborhood. There's often activity on Duke's fenced-off land.
For the most part, the community has been kept in the dark, she said.
“Do they think that we're stupid? That we're not going to figure out what's going on?” she said.
said the addition of land does not automatically change the compliance
boundary: “Moving the compliance boundary would require a permit
modification at which point staff would have to confirm the change.”
Gerken said the Lake Julian Trails is an example of how Duke
is manipulating the system, calling it a “shell game.” He said the
Asheville ash dump has serious problems with toxic groundwater
contamination. But instead of cleaning it up, the company has calculated
it is cheaper just to buy more land to pollute.
“The state is supposed to require Duke
to come in and take action to stop contaminating groundwater,” he said.
“Rather than take action when contamination hit that line, Duke
had a better idea. They bought the neighboring property, moved the line
further out, started over again, sampling at a new well, trying to
avoid taking the action we contend they should have taken years ago.”
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