Duke to seek higher rates to pay for coal ash cleanup

Dive Brief:

Costs to clean up coal ash basins in North and South Carolina could be significantly higher than Duke Energy previously estimated, according to a report from The Charlotte Observer.
The news outlet points out that in documents related to its recent earnings release, Duke indicated cleanup costs could exceed $5 billion over the next several years, about 50% higher than previous estimates. Those higher costs could wind up being passed on to ratepayers, but CEO Lynn Good said it's unclear what those rate hikes could do to customer bills.
Duke is expected to file a rate case in the second half of the year in North Carolina, and file one in South Carolina in 2018.

Dive Insight:

News emerged last month that two North Carolina Duke utilities wanted to defer recovery of more than $700 million in cleanup costs, until it filed new earnings later this year. And now the Observer's report gives some indication of just how high those costs could ultimately rise: $5.2 billion, mostly in North Carolina.

It was the leak at the Dan River plant that launched Duke's coal ash issues into national headlines.

Duke Carolinas spent $434 million from 2015 through November of 2016, while Duke Energy Progress spent about $292 million. In early January, Duke Carolinas said it had removed almost 3 million tons of coal ash at three facilities, including the Dan River plant. In addition, Duke Progress had removed about 2 million tons from its Asheville and Sutton plants.

Last year, the utility also developed a proposal to excavate 34 basins and cap another 18 basins in place as part of its efforts to protect drinking water from the waste.

The company reported a Q4 2016 GAAP loss per share of $0.33/share, compared to $0.69/share earnings in the for fourth quarter of 2015. Most of the loss in Q4 2016 related to the sale of its international companies, Duke said.

CEO Lynn Good called 2016 "a transformational year" for the company. Duke acquired Piedmont Natural Gas and exited its international business, "positioning the company for more consistent earnings and cash flow growth."Good also said the company is also focused on a long-term strategy to "modernize the energy grid, generate cleaner energy and expand natural gas infrastructure."