A non-profit says if Duke Energy makes five business adjustments, the cost of the clean-up of its 33 coal ash dumps in North Carolina wouldn’t have to be passed on to consumers.
Duke Energy signed an agreement Monday with environmental and wildlife officials in North Carolina and Virginia to clean-up toxic coal ash from the Dan River. But to clean its other sites across the state, the nation’s largest utility said it could look to a rate hike.
The agreement signed Monday requires Duke to pay any “reasonable” cost associated with the Feb. 2 spill at its power plant near Eden, which coated 70 miles of the river in gray sludge. And the agreement places no cap on what the company might be required to spend.
But Duke reiterated in a regulatory filing to investors on Monday that it is unable to predict future costs for the cleanup, new laws passed in the wake of the spill or any environmental fines that might be levied against the company.
On Tuesday, the Institute for Energy Economics and Financial Analysis released a report saying if Duke Energy take five steps, the cost of the clean-ups wouldn’t have to be passed on to consumers rate hikes.
- Click Here to view IEEFA’s complete analysis
The non-profit said Duke is well-positioned to provide the necessary financial resources required to fund the $2 to $10 billion site clean-ups.
“North Carolina residents and Duke Energy are partners,” said Tom Sanzillo, director of finance for IEEFA. “That means mutual responsibility and mutual commitments. For Duke to seek a rate increase to pay for the coal ash cleanup amounts to a breakdown of its responsibilities, and is both one-sided and short-sighted.”
IEEFA suggested Duke Energy take the following step to pay for the clean-ups:
- Additional borrowing by Duke Energy Carolinas
- Cash resources from operating flows
- Adjustments to the company capital projects portfolio (a capital expenditure program that already includes funds set aside for ash management)
- Slower dividend growth
- Sales of under-performing assets.
North Carolina lawmakers are currently debating a bill about what to do with Duke’s 33 ash dumps at 14 power plants in North Carolina, which are located along rivers and lakes that cities and towns rely on for drinking water. State environmental officials say all of Duke’s unlined waste pits, which contain more than 100 million tons of ash, are contaminating groundwater.
The Associated Press contributed to this report.
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