Duke shareholders want probe of coal ash spill
By MICHAEL BIESECKER
and MITCH WEISS
the associated press | March 28,2014
This aerial photo taken at Duke Energy’s Cape Fear Plant on March 10, by the environmental group WaterKeeper Alliance, shows a large crack in the earthen dam holding back millions of tons of toxic coal ash and contaminated waste water. The crack has since been repaired.
RALEIGH, N.C. — Duke Energy shareholders called on the company’s board Thursday to launch an independent investigation into issues surrounding a massive coal ash spill that coated 70 miles of a North Carolina river in toxic sludge.
A letter sent to Duke’s board of directors by a coalition of more than 20 large institutional investors says their confidence has been shaken by the Feb. 2 spill into the Dan River. The letter also expresses concern about an ongoing federal criminal probe and what the investors characterize as the company’s inadequate response to the environmental disaster.
The letter comes as North Carolina’s environmental agency was forced to admit state inspectors twice missed a large crack in an earthen dike holding back millions of tons of ash at a different Duke facility near the Cape Fear River.
Federal prosecutors have issued at least 23 subpoenas as part of a grand jury investigation into the spill and whether the company has received preferential treatment from state officials. North Carolina Gov. Pat McCrory worked at Duke for more than 28 years, and the company and its executives have been generous political supporters of his campaign and Republican groups that support him.
Citing a provision in the company’s charter, the investors demand an initial report from the board at an annual shareholders meeting scheduled May 1.
The group is comprised of directors of big investment funds and pension plans that hold Duke stock, including state treasurers in Connecticut, Oregon and Pennsylvania, as well as the Illinois State Board of Investment and California State Teachers’ Retirement System.
“In the wake of this catastrophic spill, shareholders are demanding answers and action,” said Oregon State Treasurer Ted Wheeler. “As the owners of public corporations, shareholders expect companies to do business the right way, which will bolster public confidence, sustain the environment, and enhance long-term share value.”
After an initial dip, the company’s stock price has remained largely steady at about $70 a share since the spill. The nation’s largest electricity company, Duke reported $24.6 billion in total revenues for 2013, with nearly $2.7 billion in net profits.
But Duke faces hundreds of millions in cleanup costs from the spill, and political pressure has been building on the company to move 33 coal ash dumps away from lakes and rivers in North Carolina. That could potentially cost the company billions more.
The ash, a byproduct left after coal is burned to generate electricity, contains toxic chemicals including arsenic, lead and mercury.
In an full-page newspaper ad Sunday, Duke president and CEO Lynn Good conceded that the company needs to regain public confidence and said the safe operation of its facilities is the highest priority.
In the last month, North Carolina regulators have issued eight environmental violations against Duke for the Dan River spill and issues at several of its other facilities.
Photos taken earlier this month show that state regulators initially missed the crack in the dam at Duke’s Cape Fear Plant.