Dive Brief:

• Calling it an example of "regulatory overreach," Duke Energy officials say they will challenge a large North Carolina fine levied by the state's Department of Environment and Natural Resources for coal ash contamination at the company's Sutton facility.
• The state said Duke had allowed a host of coal ash contaminants to leach into the groundwater at the facility for several years, requiring the largest-ever environmental fine in state history.
• Duke will file a formal appeal with the North Carolina Office of Administrative Hearings by April 9, and the company said it will show where regulators exceeded their authority.

Dive Insight:

Duke is opting to fight a $25 million fine for coal ash contamination at the Sutton facility, saying it will "vigorously contest" the "unprecedented civil penalty."

The fines relate to groundwater violations at the L.V. Sutton Steam Electric Plant in Wilmington, but company officials say the fine is excessive.

"This is a difficult step, but we cannot allow this level of regulatory overreach to go unchallenged," said Paul Newton, president of Duke's North Carolina operations. "The actions by NC DENR send a chilling message to the North Carolina business community."

Newton said the company's formal appeal will demonstrate the specific instances where state regulators acted contrary to law, exceeded its authority or jurisdiction, and didn't follow proper rules and procedures.

"We take very seriously our responsibility to care for the communities around our facilities. That's why we monitored groundwater at the Sutton plant, routinely shared data with the state, and voluntarily acted to ensure local residents continue to have a high-quality water supply," said Newton. "Our work has been proactive and focused on the well-being of the community. We took accountability and addressed the issue at Sutton ourselves. 

In 2013, monitoring data indicated that groundwater near the Sutton plant was starting to move in the direction of the Flemington community, which gets its water from Cape Fear Public Utility Authority wells near the plant. Duke said the water supply is safe and continues to meet federal and state drinking water standards, with a margin of safety, and there is no health risk to the residents.

The company is working to close 32 ash basins across North Carolina, with a plan to begin at four facilities: Asheville, Dan River, Riverbend, and Sutton. Ash can only be removed from the basins after the state issues new wastewater permits, for which the company applied in 2014. The first three of these permits are expected in early summer, with the rest of them following in late summer and fall.

"We are doing all we know to work constructively with NC DENR to meet North Carolina's aggressive deadlines to close ash basins," Newton said. "It is essential the state move quickly to support this important work."