Duke Energy agreed to a settlement with state officials and the Sierra Club that will save N.C. customers over $1.1 billion in costs they would have had to pay to offset the expense of the Charlotte-based utility's coal ash cleanup.
Ratepayers were initially slated to pay for much of the cleanup costs. Duke Energy had long stored coal ash, a byproduct of power production, mixed with water in open pits or basins. A 2014 spill of toxic ash into the Dan River at one of those pits led to a yearslong campaign by state and federal officials to clean up the waste.
"Today's settlement is a win for every Duke Energy customer," North Carolina Attorney General Josh Stein said in a Monday statement announcing the settlement. "I have long held that North Carolinians should not bear the full cost of cleaning up coal ash. As a result of today's settlement, we won't — to the tune of more than $1 billion."
Duke Energy will write off $485 million in cleanup costs that a 2019 rate case would have made customers pay for, according to the settlement. The settlement was reached Friday between the utility, the public staff of the North Carolina Utilities Commission, Stein's office and the Sierra Club. The state utilities commission, which is separate from the public staff, still must approve it.
The settlement also cuts the amount customers would pay in pending rate requests by 60%, according to a Duke Energy news release. That will save customers $270 million, Stein's office said in a news release. Duke Energy will also reduce the return it will get on the cleanup costs, according to Stein.
In total, customers will save $1.1 billion on costs from 2015 to 2030. North Carolina ratepayers were slated to pay $4 billion for the cleanup from 2015 to 2030, but after Friday's settlement they'll be on the hook for roughly $2.9 billion, according to Duke Energy spokeswoman Meredith Archie.
"This agreement addresses a shared interest in putting the coal ash debate to rest as we work toward building the cleaner energy future North Carolinians want and deserve," said Stephen De May, Duke Energy's North Carolina president, in a statement. The utility will take a nearly half-billion dollar hit to earnings due to the settlement, according to a Monday a securities filing.
In a different settlement signed late in 2019, Duke agreed to dig up nearly 80 million tons of coal ash at six sites in North Carolina. The ash will be moved to lined landfills or used to make building materials. The total cost to close all coal ash basins in the Carolinas will be between $8 billion and $9 billion, according to the utility.
For years, the state and the utility have sparred over who should pay for the cleanup. Duke said customers should. Stein and other officials argued that shareholders should. Friday's settlement splits some of the cost between the two. After the announcement, Duke Energy shares closed 2.9% higher Monday.
