by Brenée Goforth
Communications Associate, John Locke Foundation
This week, JLF’s Jon Sanders published a research brief on the Duke Energy coal-ash cleanup. Sanders describes the situation:
Prior to April 2019, Duke Energy had agreed with the state Department of Environmental Quality (DEQ) to close and excavate all but nine of its 31 coal-ash basins. DEQ had rated the remaining basins as “low risk,” which allowed Duke to use the much less expensive method of draining and capping them.
That month, however, Gov. Roy Cooper’s DEQ ordered Duke to excavate the remaining sites, a sudden decision that made the cost of coal-ash cleanup significantly more expensive.
Sanders explains that the cleanup Governor Cooper negotiated does not look at all like what he championed in 2014:
In 2014, when Roy Cooper was attorney general planning to run for governor, he urged legislators specifically to prohibit Duke Energy from being allowed to pass the costs to clean up its coal ash basins on to its retail electricity customers…
Cooper expressed a view that prohibiting such a rate increase would be on the side of consumers.
However, now that strong belief seems to have withered away, as the deal Cooper negotiated with Duke contains no consumer protection from rate hikes. Sanders writes:
There’s no such consumer protection in the settlement agreement between Cooper’s DEQ, environmental groups, Duke Energy, and not consumers. The settlement requires full excavation of seven of the nine remaining sites, with partial excavation of the other two, leaving already covered coal ash in place. The settlement agreement specifically includes language for the Utilities Commission to authorize utility rate increases related to the additional coal-ash cleanup costs forced by Cooper’s Department of Environmental Quality
The amount ratepayers could be paying appears larger than ever. Sanders explains:
This portends major rate increases on Duke’s customers. Duke officials now estimate the cost of coal-ash cleanup to be “approximately $8 billion to $9 billion” over the next 15 to 20 years. That’s up significantly from original cost estimates of $5.6 billion.