Duke Energy coal ash spill stirs grand jury, potential EPA action


A federal grand jury will convene today in Raleigh, N.C., to question Duke Energy (DUK) and state regulators after the company poured as much as 39K tons of coal ash into the Dan River last month.

DUK and North Carolina’s governor, a former DUK executive, are in dispute over the company’s obligations to clean up the spill and remove coal ash in 32 other such storage ponds in the state.

As part of a federal criminal investigation, prosecutors are reviewing records, photos and emails exchanged between DUK and state regulators about the spill.

The spill underscores a broader problem: Coal remains a top source of energy in the U.S., yet the EPA has no single federal standard requiring that coal ash storage ponds be lined and no common standard for pit or pond structures and monitoring.

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Comments (12)
  • frosty
    , contributor
    Comments (719) | Send Message
     
    But if the EPA had such standards, they would be condemned as over-regulation, anti-free enterprise, and a federal intrusion into state matters. The EPA wears a bad-guy hat no matter what happens in the environment.
    18 Mar 2014, 09:00 AM Reply Like
  • johnfreiburger
    , contributor
    Comments (224) | Send Message
     
    frosty states exactly what the Gov of NC said when he signed the bill that reduced regulation of the ash dumps. Duke spent $95,000 on the legislature to get the bill passed. Fortunately for we DUK stockholders, NC is a cheap state to buy because they actually believe most regulation is evil. I suspect if we give them enough in donations, they will let us dump coal ash in the basement of the capital.
    What will make more sense is to have the NC DOT use DUK coal ash in all roadway concrete. 30% ash content strengthens the concrete and reduces aggregate requirements for crushed stone. Duke just has to out bribe the quarry industry.
    18 Mar 2014, 09:58 AM Reply Like
  • jdiev44
    , contributor
    Comment (1) | Send Message
     
    Great Idea. Let's spread arsenic, mercury, lead and other heavy metals all over the state's roadways so it can leach into every stormwater drain and stream in the state. Heck, let's sell it to other states so they can have some heavy metals of their own.
    19 Mar 2014, 08:59 AM Reply Like
  • larch99
    , contributor
    Comments (67) | Send Message
     
    It is common practice to have fly ash in concrete, and I think I've read that it is used in about 50% of the concrete in the US. Roadways, etc. use more of it, as steel troweled concrete (pretty, smooth finish-building floors, etc.) won't work well if fly ash is used.
    19 Mar 2014, 09:07 AM Reply Like
  • old crank
    , contributor
    Comments (20) | Send Message
     
    Johnfreiburger, how did you know about the $95k? That does sound cheap. What do you think it would take to outbribe the quarry industry?
    18 Mar 2014, 10:48 AM Reply Like
  • johnfreiburger
    , contributor
    Comments (224) | Send Message
     
    Crank; Check the NY Times for an article. Not sure, but I think that's where I got the number.

     

    The fly ash in concrete was a real comment. It actually improves the performance of concrete and if government worked with utilities, I suspect we could reduce the ash inventories. Unfortunately, NC is so remarkably dumb, that they take the easy route. They have expanded the area of allowed soil pollution as the underground plumb gets bigger and bigger, rather than coming up with a solution. As Reagan didn't say: "Good government is the answer, dumb government is the problem."
    19 Mar 2014, 10:59 AM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    There aren't enough roads to use all that ash. We still need a place to store the ash, and regulations as to how the ash should be stored.
    22 Mar 2014, 12:16 AM Reply Like
  • spinrbait
    , contributor
    Comments (675) | Send Message
     
    what do the knowledgeable people about stocks and investing on here, think a worst case scenario for duk stock is. the stock price seemed to be rebounding. it has been over 71.00 a share earlier this week. then yesterday the stock closed at 68.71, and appears to be headed lower today. the 10 treasury did climb 10 basis points. that didn't help the stock. but is there reason to be concerned about the health of the company? has anyone sold long held duk stock, or considering selling because of worry over the stock price?
    i am expecting a dividend increase announcement fairly soon. do you think this coal ash scenario could effect that? or even the current dividend.
    i just can't get a handle on just how big this coal ash delima is. could a worst case scenario for duke energy actually be bankruptcy over this?
    20 Mar 2014, 09:17 AM Reply Like
  • larch99
    , contributor
    Comments (67) | Send Message
     
    @ spinrbait, I have reduced my DUK position by 70% over the last 6 months, but sold most of it over the last two-three weeks at around 71.
    I don't think the company will fold or go bankrupt, but a div. freeze or possibly cut seems like a possibility to me. The users will feel the cost of whatever cleanup is required by courts, but the shareholders will foot the bill for any penalties. I don't think they go below 60, but if they do, I'll buy the shares back I just sold.
    They don't grow the dividend quick enough for them to be a large position for me anyway, but I do worry about my older family that hold large amounts of DUK.
    20 Mar 2014, 09:23 AM Reply Like
  • spinrbait
    , contributor
    Comments (675) | Send Message
     
    i considered selling some at 71.00. but i had 72.50 strike options expiring tomorrow . i was kind of hoping they would just get assigned then. my problem is i have had my shares for a very long time. if all of my shares were sold in one year, my taxes would be astronomical. i would jump up in tax brackets, and have to pay the new medicare tax to boot. my plan is to sell about 1/3 a year for the next 3 years. also, the tax on my gains would be just like a loss, and duk would have to fall a long ways just for me to buy the same amount of shares back that i had. i think most share holders have small amounts that they accumulated over decades with the drip program. we just kind of get locked in to having to hold these these stocks. especially for those who need the dividend just to survive.
    20 Mar 2014, 11:16 AM Reply Like
  • larch99
    , contributor
    Comments (67) | Send Message
     
    I would hold, especially if you are depending on the dividends. My older family has a pretty large position, and they depend on the dividends as well for income stream. I still think DUK will get hit with some fines, but see them holding the div. yield as is, not cutting it, etc. I think there will be more political fallout than anything.
    21 Mar 2014, 09:35 AM Reply Like
  • johnfreiburger
    , contributor
    Comments (224) | Send Message
     
    I believe the state of NC will do all it can to protect DUK and EPA action will take years. The current law in NC is that the waste piles are fine as long as they are contained and the subsoil water monitored. As pollution has spread underground, the state has expanded the allowable boundaries so that remediation was not required.
    I suspect NC will provide rate increases for such clean-up as is required as well as tax breaks. They may even use my fly ash idea and require that all roadwork use, and pay DUK, for fly ash.
    Regulatory environment is factor in utility investment. The refusal of many states to allow infrastructure replacement (PA, NY) paid for by rate payers was a factor in the gas blast in NYC. 120 year old cast iron pipes leak! Look at the Phil gas pipe replacement program, scheduled to be completed in 2100! Those utilities are faced with huge gas leak losses as well as litigation, but cannot replace the corroded infrastructure because the rates cannot be raised to pay for it.
    NC on the other hand, while not owned by utilities, has their voice heard, just as the Koch Brothers and Amer Trans can ask about anything they want of WI.
    Where you invest makes a difference in reducing risk, as socializing of risk while privatizing profits is the American Way, as is the commoditization of public policy. I'm holding my DUK and SO stock and just purchased more. That makes me a part owner of the State of NC as well.
    20 Mar 2014, 09:42 AM Reply Like
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