Duke Energy Wins $215M In Settlements With Insurers Over Coal Ash Costs
Duke Energy has reached financial settlements totaling $215 million with a group of insurers it sued four years ago to recover costs for cleaning up coal ash.
The amount of the settlements was announced Wednesday by North Carolina Attorney General Josh Stein.
Charlotte-based Duke has reported the settlements to state regulators, but the amounts have been redacted from public documents. Stein is not a party to the cases. But he says the money and a separate $1.1 billion settlement he reached with Duke in January will reduce what customers have to pay for cleanups.
Duke spokesperson Bill Norton said the company expects coal ash cleanups in North Carolina to cost $5 billion over the next two decades. The settlements mean customers will still pay about $3.8 billion of the cost.
“We are pleased to have reached settlements with all of the insurers involved in our North Carolina coal ash insurance litigation, and the case will be resolved shortly. The terms of the settlements are confidential, but net proceeds will help offset future costs included in customer rates for this important work,” Norton said in an email.
Duke originally had sought $600 million from about 30 insurers in suits filed in March 2017. Some of the insurers have merged, and in the end there were 14 settlements, Norton said.
Coal ash is the toxic residue left after burning coal. Duke is under order by regulators and the courts to clean up coal ash storage sites at its former coal-fired power plants. Some have already been excavated and the ash moved to modern, lined landfills to prevent contamination of groundwater. In some cases, the coal ash is being recycled for industrial use. Other sites have until 2038 to close.
The company argued in the suits that insurance policies it held until the 1980s should cover some costs of cleanups at 14 current and retired coal plants. All the companies had provided Duke with general liability insurance.
The insurers fought the suits. They argued that because Duke stored its coal ash in unlined pits as part of its normal practices, any property damage "was caused intentionally, by or at Duke's direction" and there weren't any distinct pollution events that triggered coverage.
Norton said the insurance settlements won't affect rates until it files a new rate request in the coming years.
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