Duke Energy Directors Sued by Shareholders Over Coal Ash

Duke Energy Directors Sued by Shareholders Over Coal Ash By Sophia Pearson

May 22, 2014

http://www.businessweek.com/news/2014-05-22/duke-energy-shareholders-sue-ove

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Duke Energy Corp. (DUK:US) shareholders accused the board of exposing the

company to billions of dollars in liability by failing to clean up coal-ash

ponds in North Carolina, setting up another legal challenge for the largest

U.S. utility owner after a February spill in the state.

Company officials have known for years that coal-ash ponds were seeping

toxic chemicals into soil and rivers, shareholders Edward Tansey and the

Police Retirement System of St. Louis said in a complaint made public today

in Delaware Chancery Court in Wilmington.

³The board was well aware of the company¹s longstanding violations, yet

failed to take any meaningful action to prevent further harm,² the

shareholders said. ³Instead, the board caused or allowed Duke Energy to

operate without proper permits, continuously pollute the environment, and

fail to properly inspect the company¹s coal ash ponds.²

About 39,000 tons of ash spilled from a pond at a shuttered coal-fired power

plant near Eden, North Carolina, on Feb. 2. A federal grand jury is probing

the state¹s oversight of the company¹s coal-ash ponds and state and company

officials have been subpoenaed as part of the investigation.

The company said in April that the total tab for cleaning up its 33 coal-ash

ponds in North Carolina may reach $10 billion and take as long as three

decades.

Dan River

Duke Energy said in a statement today that its board and senior managers

have been ³actively engaged in coal ash management and oversight² before and

after the Feb. 2 release. ³The company took immediate responsibility for the

Dan River incident and is developing a comprehensive ash management plan

that is both environmentally sound and in the best interests of the

company¹s customers and shareholders,² it said.

The company said in a regulatory filing today that it reached an agreement

with the U.S. environmental protection agency for cleaning up the Dan River

site.

Duke¹s board created a ³lawless culture² at the Charlotte, North

Carolina-based company that allowed widespread acceptance of environmental

abuse, the shareholders alleged. The lawsuit names Lynn Good, Duke¹s chief

executive officer, Keith Trent, the company¹s chief operating officer, and

14 current directors.

The shareholders are asking the company to strengthen its internal controls

to comply with federal and state regulations governing the storage and

maintenance of coal-ash disposal. They also seek compliance with a March 6

order by a state court that the company eliminate sources of contamination

at 14 coal plants in North Carolina, including the 33 coal-ash ponds.

The case is Tansey v. Good, CA9682, Delaware Chancery Court (Wilmington).

Lisa Evans

Senior Administrative Counsel

Earthjustice

21 Ocean Ave.

Marblehead, MA 01945

T: (781) 631-4119

C: (978) 548-8645

www.earthjustice.org

*please consider the environment before printing

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