by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
The Daily Tar Heel has an article about the coal-ash cleanup settlement agreement between Gov. Roy Cooper’s Department of Environmental Quality, several environmental groups (collectively referred to as “Community Groups”), Duke Energy, and not electricity consumers. The article quotes me on the prospect of rate increases to come from this settlement, which I explained was a certainty given that the language in the agreement is written explicitly for the Utilities Commission to allow Duke to recover the new cleanup costs through rates.
The article then speaks to a board member of Appalachian Voices, one of the “Community Groups” identified in the settlement agreement.
David Hairston, a board member of the environmental group Appalachian Voice, is more optimistic about fighting the rate hike with his fellow activists.
“Part of the battle is that every time one of us gets in front of a microphone, we have a way to get the word out that we need our state to make sure that Duke Energy doesn’t get a rate hike to pay for something that has damaged our communities,” he said. …
“If you look at it, this is going to take a 10-year period,” Hairston said. “Duke is averaging billions of dollars of profit every year. If they have to pay the $8 [b]illion, what they claim it’ll cost to clean all of this stuff up, over a 10-year period, this will be only one percent of their profits every year. I don’t think the elderly and the poor should be obligated to foot the bill for something that they’ve made profit [off of] for over 40 years.” …
“If Duke Energy wanted to do the right thing, this wouldn’t be a drop in the bucket for them,” Hairston said. “But the people here who are living check to check, we can’t afford to foot the bill for them.”
Does he not know that (a) his group and (b) his fellow activists as represented by the “Community Groups” already surrendered that fight, along with (c) Cooper’s DEQ?
Appalachian Voices was a signatory to the agreement, as were the Stokes County Branch of the NAACP, MountainTrue, The Catawba Riverkeeper Foundation, Waterkeeper Alliance, Sierra Club, Roanoke River Basin Association, Cape Fear River Watch, Inc., Neuse River Foundation/Sound Rivers, Inc., and NC State Conference of the NAACP.
That means, despite whatever they might say, these groups deliberately chose to have you, your neighbors, the poor, the elderly, people living check to check, etc. pay for the additional coal-ash cleanup, not Duke.
Here’s what Appalachian Voices agreed to — was it unbeknownst to their board? It’s in Section 53 of the agreement, “Stipulations Between Only the Parties to this Agreement Regarding Rate Recovery Proceedings.” That section is chock-full of the magic words to the Utilities Commission to allow a rate increase.
For the Utilities Commission to allow the utility to pass through costs like coal-ash cleanup down to consumers, state law requires those costs to be “just and reasonable and prudently incurred.”
In Section 53 of the agreement, Part (a), Appalachian Voices et al. agree that Duke closing the coal-ash impoundments in the agreement is “reasonable, prudent, in the public interest, and consistent with law.”
In Part (c), they agree not to challenge or even object in court or before administrative body (such as the Utilities Commission) “the reasonableness, prudence, public interest, or legal requirement for Duke Energy to comply with the obligations imposed by this Agreement.”
Those words aren’t in the agreement under a section on rate-recovery proceedings by accident; Appalachian Voices et al. knowingly agreed to let Duke pass the costs of the newly required cleanup costs down to electricity consumers.