It was the biggest fine for environmental damages ever levied by North Carolina, even after a later settlement reduced it by more than two-thirds.

In March, the N.C. Department of Environment and Natural Resources – now Department of Environmental Quality – announced it was fining Duke Energy $25.1 million because of groundwater contamination from coal ash at Duke’s Sutton Plant near Wilmington. The amount was “based on the extent of impacts to groundwater, the characteristics of the constituents causing the impacts and the duration of the violations,” according to DEQ’s news release at the time.

“Today’s enforcement action continues the aggressive approach this administration has taken on coal ash,” DEQ secretary Donald van der Vaart said in the release. “In addition to holding the utility accountable for past contamination we have found across the state, we are also moving expeditiously to remove the threat to our waterways and groundwater from coal ash ponds statewide.”

Duke contested the fine to the state’s Office of Administrative Hearings, citing a number of instances “where evidence demonstrates that the regulator acted contrary to state law, the agency’s own rules, policies and procedures and the longstanding interpretation of the regulations,” Duke Energy said in a statement. The utility used a 2011 policy memo, written by the Perdue administration, as the basis for its challenge. That memo allowed for penalties to be assessed for groundwater contamination, but the intent, officials contended, was to favor corrective action in lieu of fines.

Negotiation between DEQ and Duke resulted in the reduction of fines and penalties to $7 million – still the largest ever levied for environmental damages, according to DEQ – and an estimated $10-$15 million in accelerated remediation costs. The settlement, announced Sept. 29, held Duke Energy accountable for groundwater contamination at all 14 of its coal ash facilities and required an accelerated cleanup of groundwater contamination at four, including the Sutton Plant.

Duke spokeswoman Paige Sheehan said the $7 million penalty covers “past, present and future concerns at all plants.”

Reacting to ambiguities in the 2011 memo, officials with the McCrory administration said following the Sept. 29 settlement they would immediately rescind that 2011 policy to clarify that state government has all the tools required to enforce the law and penalize future polluters in addition to requiring site clean-up.

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