TAR HEEL VIEW: Don’t let Duke pass coal ash cleanup cost to customers


Families forced to choose between paying the power bill, buying medicine and stocking the fridge should pay for Duke Energy’s sloppy storage of coal ash, empty suits said with a straight face.

Duke Energy Progress wants central and eastern North Carolina electric customers to pick up the tab for cleaning up coal ash pits in the wake of a 2014 state law tightening controls on energy waste disposal. The law was a direct result of a spill that fouled the Dan River, coating wide swaths of the waterway in black sludge.

The electric giant wants to raise rates to cover compliance costs and is making its case to the N.C. Utilities Commission in a hearing. If its rate increase is approved, the average residential customer will see roughly $11.13 added to monthly bills, down from an initial requested increase that would pick ratepayers’ pockets to the tune of $19.50 per month.

Opponents of the rate hike — consumer advocates and environmental watchdog groups — say Duke Energy and its shareholders should pay the freight. Duke executives say their company has already paid to clean the Dan River spill and is merely passing along the recurring cost of complying with new regulations that require existing, stable coal ash basins to be cleared out.

Duke Energy Progress President David Fountain told utilities commissioners that adding the expense to ratepayers’ bills “is comparable to tire stores charging customers an extra fee to dispose of an old set of wheels,” wrote Emery P. Dalesio of The Associated Press.

“We are, for the benefit of our customers, managing our coal ash basin closure in ways that are environmentally compliant,” Fountain said. “Those are all environmental compliance costs that we’re seeking cost recovery for because those costs were incurred in a reasonable and prudent manner.”

Utilities can pass along costs to consumers if they were “prudently incurred,” but opponents of the rate hike contend that “storing hundreds of tons of toxic coal ash in unlined pits near water was not prudent,” WRAL-TV’s Travis Fain wrote.

Robert Page, an attorney whose clients are manufacturing companies requiring large volumes of electricity to operate, disputed Fountain’s comparison of the rate hike to a tire store disposal fee.

“The tire company is not going to accumulate 40, 60, 100 years worth of tires before they do something about recycling it,” Page said. “The tire company is not going to allow those used tires to stack up and up and up and up before it gets those used tires off of its property.”

The point is well-made that cleanup expenses are magnified by Duke’s decades of inaction. Should college graduates renting their first apartment be forced to pay for energy waste that’s double their age when they have the power turned on?

Further undercutting Duke’s tire store analogy are the market forces of competition and consumer choice. A buyer willing to haggle can convince merchants to waive disposal fees or reduce the retail price of the tires by a commensurate amount to effectively absorb the added cost. If John Doe Tires balks, perhaps Jane Doe Tires will go the extra mile to earn the buyer’s business.

Electric utilities are government-sanctioned and government-regulated monopolies. They don’t have to compete for customers. When prices are high and service is poor, ratepayers can’t simply take their business elsewhere. We’re stuck in an arranged marriage with these monoliths.

That captive customer base is susceptible to being gouged every time a utility decides to take on new costs or state, federal or local laws require it to do so.

The N.C. Utilities Commission, whose members are appointed by the governor and General Assembly, are tasked with weighing the interests of both consumers and regulated utilities. It strives for an equilibrium that keeps companies in the black and prevents ratepayers from being fleeced.

Duke Energy Progress had decades to find a long-term storage solution for its coal ash. It failed to plan and failed to save, waiting until an environmental disaster struck and lawmakers marched in to address the crisis. It was an accident waiting to happen.

Struggling electric customers should not feel a pinch in the pocketbook because Duke didn’t have the foresight to dispose of its waste products safely. The company and its shareholders must absorb the cost of bad business decisions.

We call on the N.C. Utilities Commission to reject the rate increase and make Duke clean up its mess on its own dime.

The Wilson Times

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