Duke Energy updates N.C. legislative commission on coal ash

         Duke Energy updates N.C. legislative commission on coal ash

PR Newswire

RALEIGH, N.C., April 22, 2014

RALEIGH, N.C., April 22, 2014 /PRNewswire/ --Duke Energy's North Carolina
State President, Paul Newton, today spoke before the N.C. Joint Environmental
Review Commission (ERC) on the company's response to the Feb. 2 Dan River coal
ash incident and its near-term and longer-term actions to address coal ash
across the state.

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"Duke Energy is committed to working with policymakers and regulators to
implement both short- and long-term solutions to coal ash management in North
Carolina," said Newton.

Newton told the ERC the company takes full responsibility for the Dan River
incident. He also discussed the significant steps Duke Energy has taken on the
site and in the river since the company's previous update to the ERC on Feb.
17. These include:

  oOngoing water sampling that demonstrates the Dan River has returned to
    normal water quality conditions, and drinking water remains safe.
  oRemoving an ash deposit near the Dan River site and preparations to begin
    removing an ash deposit behind the Schoolfield Dam near Danville in the
    coming weeks.
  oContinuing to work constructively with federal and state experts from the
    U.S. Environmental Protection Agency (EPA), U.S. Fish and Wildlife
    Service, Virginia Department of Environmental Quality and N.C. Dept. of
    Environment and Natural Resources (NCDENR) to monitor the river and
    evaluate additional remediation efforts.

Newton said as a result of Duke Energy's recently completed $9 billion power
plant fleet modernization program, the company has retired more plants than
any other time in its history. The company had always planned to permanently
close its ash basins as it retires units, following existing industry norms
and compliance expectations of state and federal regulators.

Immediately after the Dan River incident, the company engaged independent
third-party engineering experts to assess all of the company's ash basins by
May 31, 2014, and immediate action will be taken to address any significant
issues, Newton said.

The company also is preparing a comprehensive, longer-term ash basin strategy
that involves intensive analysis at all of its coal plant sites that begins
next month. That work will be completed by the end of the year, with closure
strategies recommended for each site.

Newton described the key guiding principles that will help determine
site-specific closure strategies. Those include the proximity of the ash
basins to downstream drinking water intakes and downstream groundwater sources
used for drinking water. They also focus on community considerations (such as
traffic), potential environmental and health impacts, cost-effectiveness and
amount of time it takes to complete the project.

Cost estimates for Duke Energy's plans for ash (see chart at
http://www.duke-energy.com/pdfs/CoalAshPlanWaterfall.pdf)
Newton said the combination of the company's previous plans, and its more
recent actions outlined in its March 12 letter to N.C. Gov. Pat McCrory and
NCDENR Secretary John Skvarla, are estimated to cost approximately $2 billion
to $2.5 billion.

These plans assume the following costs and activities:

  oThe costs of excavating and relocating ash from the company's Dan River
    and Riverbend sites to a lined structural fill or lined landfill. Those
    costs are assumed for Sutton as well, while work is underway to determine
    the most appropriate closure approach.
  oThe costs to continue to move ash from the Asheville plant to a lined
    structural fill.
  oThe costs to convert three remaining coal units to dry fly ash systems.
  oA hybrid "cap in place" closure approach for the company's remaining 10
    coal plant sites in N.C. This provides for some excavation on sites to
    consolidate ash, with a synthetic barrier to keep ash dry and protect
    groundwater. Site-specific studies have been underway to determine the
    most appropriate closure method.
  oDry bottom ash handling at operating sites in N.C. This type of system
    transports bottom ash wet and then stores it dry.

Costs increase significantly to excavate and remove all ash from coal sites
Although excavating and relocating ash in basins is warranted at some sites,
costs increase by $4 billion to $5.5 billion with a one-size-fits-all
"excavate and remove" approach across the N.C. coal fleet, Newton said.

There is no available capacity at Duke Energy's existing lined landfills to
receive excavated ash, so there would be a need to site, permit and construct
new lined landfills or structural fills. The time to relocate basin ash to new
lined landfills or structural fills would take approximately 20 to 30 years,
Newton added.

Newton said if the company were also required to convert to all-dry ash
handling systems, the costs would increase an additional $1 billion to $2
billion. These steps, added to the total excavate and remove approach,
collectively would cost a total of $7 billion to $10 billion.

"The intensive analysis of our coal sites will continue during the rest of
this year," Newton said. "This work, combined with our guiding principles,
will further inform closure strategies and related costs."

"In our view, the best approach to manage coal ash for our customers and North
Carolina lies somewhere along this spectrum, with steps that address ash at
both retired and operating plants. We look forward to working constructively
with our regulators to achieve prudent, environmentally sound and
cost-effective solutions," Newton added. 

The costs outlined in Duke Energy's plans are approximations subject to
completing detailed engineering studies. They do not include costs associated
with financing, inflation and increases in operating and maintenance expenses.

The management of coal ash is a national issue
According to the federal EPA, there are 676 ash basins in the U.S. and Duke
Energy has 33 in North Carolina, about half of which are inactive. Fly ash
accounts for about 80 percent of the ash produced, and bottom ash makes up the
other 20 percent.

In 2013, Duke Energy produced 1.8 million tons of ash at its North Carolina
plants and approximately 67 percent of this was reused or recycled
beneficially in structural fill, cement, cinder blocks and other construction
materials.

For more information about Duke Energy's ash management activities, its plans
at specific plants and its response to the Dan River incident, see
http://www.duke-energy.com/ash-management/.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded
on the New York Stock Exchange under the symbol DUK. More information about
the company is available at: www.duke-energy.com.

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Contact: Tom Williams
Office: 980.373.4743 | 24-Hour: 800.559.3853

SOURCE Duke Energy

Website: http://www.duke-energy.com
 
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