Duke Energy Corp. reached a settlement with North Carolina regulators and environmentalists to close its remaining coal ash ponds in the state, ending a long-running fight over cleaning up waste from power plants.
The settlement announced Thursday, which saves the company about $1.5 billion, requires Duke to remove nearly 80 million tons of coal ash. Seven basins will be fully excavated, and the waste will be shipped to lined landfills to prevent groundwater contamination. Two other sites will be partially excavated.
The deal ends a legal dispute with the state, which in April ordered the utility to excavate all the ponds. Duke's savings come from avoiding a full excavation at two sites, where lined landfills were built atop capped ash ponds. Duke estimated in April that excavating all of its ash basins across North and South Carolina would cost about $10.5 billion.
"This agreement significantly reduces the cost to close our coal ash basins in the Carolinas for our customers, while delivering the same environmental benefits as full excavation," Stephen De May, Duke Energy's North Carolina president, said in a statement.
Under the settlement, Duke's cleanup is expected to take 15-20 years and cost $8 billion to $9 billion across the Carolinas, including $2.4 billion that's already been spent.
Most coal ash left over from burning the fuel is stored at power plants, either in dry landfills or ponds. The sites -- which contain arsenic, boron, lead and other toxins -- are considered hazardous by environmentalists who say they pollute groundwater. The settlement announced Thursday was negotiated in part by the Southern Environmental Law Center, which has long pushed for cleaning up coal ash ponds in the U.S. Southeast.
"This agreement is the culmination of nine years of work by communities across North Carolina and puts in place the most extensive coal ash cleanup in the nation," Frank Holleman, senior attorney at the center, said in a statement.
Duke shares fell as much as 0.9% Thursday as the utility sector at large declined. Nonetheless, Guggenheim Securities analysts led by Shahriar Pourreza said the settlement was positive for the company and expressed optimism that regulators would allow Duke to recover the cleanup costs from customers.
"Bottom line: this helps to remove the [North Carolina] coal ash overhang that certainly was a headline concern for many investors," Pourreza said in a research note.
The issue of coal ash storage drew national attention after a spill in Tennessee in 2008. Cleanup became a priority in North Carolina after a 2014 leak from a Duke Energy site left coal ash coating 70 miles of the Dan River on the state's border with Virginia.
Duke Energy pleaded guilty in 2015 to federal environmental crimes after an investigation found that the company allowed coal ash dumps at five power plants to leak toxic waste into water supplies. The company agreed to pay $102 million in fines and restitution.
In 2018, Duke Energy agreed to pay a $156,000 penalty for similar state environmental violations at three other power plants after pollution entered groundwater and the adjoining Catawba and Broad rivers.
Information for this article was contributed by David R. Baker and Will Wade of Bloomberg News; and by staff members of The Associated Press.
Business on 01/03/2020