Paying for coal ash clean up

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There’s about as much rhetoric being tossed around regarding the coal ash issue as there is coal ash in Duke Energy’s coal ash pits themselves.

Environmentalists accuse the utility of shirking its responsibility to protect the environment. Duke officials say the cost of the clean up ordered by the state is not cost-effective.

Who you believe is probably more dependent on which organization you most want to believe than it is on a real understanding of the complex issue surrounding the coal ash and its proper disposal.

But one statement in the most recent round of comments on Duke Energy’s plan to appeal a state ruling that it excavate its coal ash pits and move the waste to a lined landfill, does have us worried.

The company said it is making strong progress in closing every ash basin in the state in ways that fully protect people and the environment while keeping costs down for customers.

Keeping costs down for customers.

That statement brings to mind images of sky-high electric bills, generating revenue for the company to help pay for the clean up, which it estimates will increase by $4 to $5 billion if the company has to follow the state’s order.

Already, the company said, it has incurred about $4.5 billion in clean up costs.

But it’s not a given that customers will have to foot the bill for this clean up. In a recent rate hike request, the North Carolina Utilities Commission allowed Duke to collect only a portion of its costs so far.

The remainder of that cost will have to be borne by the company – and by its stockholders to be specific. Those stockholders face the prospect of losing share value if the company’s profits are not as strong as projected.

To be fair, Duke Energy is a regulated company. It can’t go out and set prices at whatever level it so chooses. The state of North Carolina, in our case, has a say in that matter.

But the company and its investors should bear the burden of this incident and not the customers. Customers didn’t have a say in how to manage the coal ash. The company did. When problems arose, the responsibility for fixing it – and paying for the fix – rightfully rests with the company.

Reasonable people can debate the scientific benefits of one clean-up method over another all day long. We don’t pretend to have the scientific knowledge it takes to make an informed decision. But we can say that doing business, even a regulated business, comes with risks.

Duke took a risk, whether intentional or not, to store its coal ash the way it did. That decision clearly didn’t pay off in the long run. It wouldn’t be fair, now, to ask customers to pay the cost of the risk the company took.

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