Duke Energy Directors Sued by Shareholders Over Coal Ash By Sophia Pearson
May 22, 2014
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
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
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).
Senior Administrative Counsel
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