Duke Energy plans to “vigorously contest” what it terms “an unprecedented civil penalty” issued against it recently by the N.C. Department of Environmental and Natural Resources (DENR). The utility announced its plans in a news release Tuesday.

DENR announced March 10 that it would fine Duke Energy $25.1 million for groundwater contamination resulting from coal ash-related violations at Duke’s L.V. Sutton Steam Electric Plant near Wilmington. According to the state regulatory agency, the fine is the largest-ever penalty for environmental damages ever levied by the State of North Carolina.

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

In its announcement, the company said it will file a formal appeal with the North Carolina Office of Administrative Hearings by April 9, demonstrating the specific instances in which it believes DENR “acted contrary to law, exceeded its authority or jurisdiction, and didn’t follow proper rules and procedures.”

Not so, say DENR officials.

“The N.C. Department of Environment and Natural Resources issued a civil penalty assessment to hold Duke Energy accountable for groundwater contamination at the Sutton Plant near Wilmington. The state agency calculated the penalty in accordance with state law,” DENR spokesman Jamie Kritzer said in an email Tuesday. “Duke Energy is exercising its legal right to appeal the fine within 30 days to the N.C. Office of Administrative Hearings.”

Duke officials aren’t sure what that appeal process will look like, said company spokeswoman Paige Sheehan in a telephone conversation Tuesday. The Office of Administrative Hearings will determine a schedule that might include filing deadlines and dates for Duke Energy representatives to appear, she said, adding, “We will await word from the Office of Administrative Hearings to let us know what schedule it lays out.”

Newton said in the release that Duke Energy has taken “very seriously” its responsibility to care for the area around the Sutton plant, specifically the Flemington community, which gets its water from Cape Fear Public Utility Authority wells near the plant.

“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,” Newton said in the release. “Our work has been proactive and focused on the well-being of the community. We took accountability and addressed the issue at Sutton ourselves.

“We are as committed as ever to closing ash basins in ways that protect groundwater. We will continue to advance those plans while we sort through this separate legal issue,” said Newton.

In the release, Duke officials said that monitoring data in 2013 showed that groundwater near the Sutton plant was starting to move toward the Flemington community. While the water supply is safe and continues to meet federal and state standards, the utility has partnered with CFPUA to fund the extension of a municipal water line to the area, which will eliminate the need for drinking wells.

“That project will be completed in less than two years, well before groundwater impacts would reach the public water supply,” the release stated.