Duke Energy to Shutter Three Coal Units, Resolve Drawn-Out Clean Air Act Lawsuit

Duke Energy has settled a 15-year-old lawsuit for allegedly violating the Clean Air Act when it made modifications at 13 coal-fired power units in North Carolina. 

The Environmental Protection Agency’s (EPA’s) and the Department of Justice’s (DOJ’s) original case filed in 2000 focused on 25 Duke Energy coal units. As it has in more than 30 similar cases against power plant owners, the government claimed that certain maintenance and repair projects at the power plants were “major modifications,” as defined by the Clean Air Act, and that Duke Energy failed to obtain permits for the projects and install the “best available emission controls,” as required.

However, claims against 12 of those units were eventually dismissed. Duke Energy has since shuttered 11 of the remaining 13 units. The company has outright denied the alleged violations. In the settlement agreement filed on Sept. 10 with the U.S. District Court for the Middle District of North Carolina, it underscored that it “complied fully with federal law, and is agreeing to settle the case solely to avoid the costs and uncertainties of continued litigation.”

The settlement agreement comes weeks before trial was set to begin in October 2015.

The EPA declared the settlement agreement a victory for public health in a statement on Sept. 10. It lauded efforts by its national enforcement initiative to control emissions from large sources of pollution, which includes 32 coal-fired power plants in 10 states, under the Clean Air Act’s Prevention of Significant Deterioration (PSD) requirements. The total combined sulfur dioxide and nitrogen oxide emission reductions secured from all of these settlements will exceed two million tons each year once all of the required pollution controls have been installed and implemented, the agency said.

Under the settlement agreement, Duke Energy will close by Dec. 31, 2024, two units at its five-unit, 1,140-MW Allen power plant in Belmont, N.C.—the two units that are still operating and remain part of the litigation. The company said it would also shutter a third unit at the Allen plant in December 2024, even though it is not part of the case.

In its latest integrated resource plan, the company had planned to retire those units by 2028, which means the settlement will force their closure 42 months early. The units began operation between 1957 and 1959.

The settlement agreement will also see Duke Energy spend $4.4 million on environmental mitigation projects and donations, including for renewables and energy efficiency projects in impoverished North Carolina and South Carolina counties. The company will also donate $175,000 each to the U.S. Forest Service and National Park Service. Additionally, Duke Energy will pay a $975,000 civil penalty to the government.

For more about the EPA’s efforts to enforce New Source Review violations at coal-fired power plants nationwide, see this Big Picture infographic from October 2013.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)


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