With some legal hair-splitting, the federal government was able to keep the lights on at federal court houses and military bases across North Carolina when Duke Energy Corp. pleaded guilty to nine violations of the federal Clean Water Act.
The company was "able to reach an agreement to waive debarment for all but two retired power plants ... which (will) have no practical impact on customers," spokeswoman Paige Sheehan said, calling it "a good outcome."
The agreement was part of the guilty plea entered Thursday in federal court in Greenville, North Carolina, as part of a negotiated settlement the country's largest utility reached with federal prosecutors.
Under federal law, a company that commits criminal violations is "debarred'' from engaging in future business with government entities.
Federal agency debarments rose almost 14% in Fiscal Year 2014 according to an annual report recently published by the Interagency Suspension and Debarment Committee.
The jump from 1,696 debarments in FY 2013 to 1,929 debarments in FY 2014 continues a five-year trend in which the number of annual debarments has almost doubled, according to the Hogan Lovells law firm.Writing in Lexology last month, it said the large increase in recent years is due to pressure that Congress and the Government Accountability Office have placed on federal agencies to implement effective suspension and debarment programs.
In addition to court houses across the state and coastal Coast Guard operations not served by electric co-ops, disbarment would have meant no electricity at such key military instillations in eastern North Carolina as Fort Bragg, Camp Lejeune, Seymour Johnson Air Force Base, Cherry Point Marine Corps Air Station, and Military Ocean Terminal Sunny Point, "the key ammunition shipping point on the Atlantic coast for United States forces worldwide."
Although the federal government could have purchased power elsewhere for its North Carolina operations, the transmission lines serving the facilities are owned by Duke Energy.
Three of the utility's operations -- Duke Energy Carolinas, Duke Energy Progress and Duke Energy Business Services -- reached an Interim Administrative Agreement with the U.S. Environmental Protection Agency to waive debarment for all Duke facilities, with the exception of two retired coal-fired power plants: Riverbend and H.F. Lee, spokeswoman Catherine Butler said in an email.
"Because Riverbend and H.F. Lee no longer burn coal to generate electricity, their interim debarment has no practical impact on the company or its customers, including government or military customers," she noted.
"The interim debarment is related to specific seeps discussed in the plea agreements at Riverbend and H.F. Lee facilities. Once the EPA has found that these seeps have been addressed, then the Interim Administrative Agreement will be revised to include coverage of these facilities," Blair added.
Duke Energy pleaded guilty Thursday to environmental crimes resulting from a North Carolina power plant's coal ash spill into a river and management of coal ash basins in the state, U.S. prosecutors said.
The plea entered in federal court in Greenville, North Carolina, by the country's largest power company was expected as part of a settlement with the U.S. Department of Justice announced in February.
As part of the deal, Duke has agreed to pay $102 million in fines.
The company admitted to failures at five of its power plants over several decades that allowed coal ash to enter waterways, including documented problems with the 48-inch pipe that would eventually cause the spill into the Dan River in February 2014. The stormwater pipe beneath a coal ash pond at Duke's retired power plant in Eden ruptured, releasing up to 27 million gallons of wastewater and as many as 39,000 tons of coal combustion residue into the river that supplies drinking water to two towns in neighboring Virginia.
Duke "failed to take reasonable steps to minimize or prevent discharge of coal ash to the Dan River that would adversely affect the environment," according to a joint statement filed by the company and prosecutors in federal court. Prosecutors charged several Duke subsidiaries with nine misdemeanor violations of the Clean Water Act as part of the case.
Duke has separately agreed to close and clean up coal ash sites at 14 coal plants in North Carolina, though their methods have been disputed.