At Last

On coal ash ponds, the McCrory Administration finally submits to the inevitable

This, from Gov. McCrory and DENR Secretary John Skvarla to Duke Energy CEO and President Lynn Good on Tuesday, is welcome, overdue and aggravating in the extreme. It’s worth re-running in full:

We remain quite concerned about the coal ash spill discovered February 2 at your Dan River Plant in Eden and the ongoing environmental damage it is causing. So far, drinking water supplies remain safe. But as a state we will not stand by while coal ash ponds remain a danger due to their proximity to where so many North Carolinians get their drinking water.

At Dan River, we have given you a 60-day notice that DENR will reevaluate your permit to discharge to the state’s waters. More broadly, we have expressed our primary desire that coal ash ponds be moved away from these essential resources.

We must look to the future of coal ash storage and how we can best protect the citizens of North Carolina and our environment. As you know, our rivers and lakes not only provide drinking water to many North Carolinians, but they are also natural and economic resources we must protect and treasure both today and for future generations.

ln this regard, we require all relevant information in order to make proper decisions for the state. Therefore, we request that you provide to the Department of Environment and Natural Resources by March 15 your plans for these facilities, including any options, priorities, alternatives, preliminary designs, cost estimates, or any other pertinent information you possess regarding Duke Energy Carolinas and Duke Energy Progress coal ash ponds. Please consider this request of an urgent nature and contact Secretary Skvarla to clarify any necessary details.

We thank you in advance for joining us as we work toward a permanent solution to these issues for the good of all North Carolinians.

For all the well-deserved heat McCrory and his administration have taken over the Dan River spill and McCrory’s 28-year employment by Duke, it’s important to understand that the coal ash problem didn’t begin with the McCrory administration. Minimal enforcement of water quality standards with regard to coal ash preceded Skvarla’s appointment as DENR secretary. A long series of Democratic governors—Perdue, Easley, Hunt—failed to appreciate (or even fully investigate) the risk and let the waste sit in unlined ponds. For years.

So give McCrory some credit for telling his old employers in unequivocal language to clean the things up and set a tight deadline for a plan—even though circumstances forced the governor’s hand. A federal investigation and nationwide media scrutiny will do that.

But it’s still pretty infuriating to hear this less than a week after Skvarla stood in front of the assembled state press at DENR headquarters in Raleigh and castigated environmental groups for their “one size fits all” insistence that the state force Duke to clean up the ash ponds. There could be added environmental risks, Skvarla said. We have to follow the process, he said. “I can assure you it’s not that simple,” he said.

Well, yes, it is. It always has been. All the situation lacked was a state government willing to do its damn job. They were unwilling to do so until, as is so often the case in these United States of Shareholder Expectations, catastrophe forced them to.

If you had any doubt about who’s been running the show all this time, take a good look at this. It’s a report released Tuesday by the Washington-based research and advocacy organization Citizens for Tax Justice. Titled “The Sorry State of Corporate Taxes,” it documents the extent to which tax breaks, shelters and loopholes enable the nation’s Fortune 500 companies to pay far less in corporate taxes than they’re supposed to—at times, nothing.

Duke Energy is one of those. From 2008-12, Duke was one of 26 large U.S. corporations that received more in tax breaks than it paid in taxes. During that five-year period, a time when the company’s profit was just more than $9 billion, Duke’s total income tax outlay was negative $299 million. Duke last paid income taxes of any kind in 2008.

Let’s not be too harsh on Duke Energy. They’re beneficiaries of the rule, not the exception. Duke belongs to an American utilities industry that from 2008-12 had the lowest effective tax rate of any industry in the country—2.9 percent. (The official corporate rate is 35.)

There’s a reason why companies like Duke can win monopolies, control rates, poison water and air through pure neglect and do it all virtually tax-free. We let them, because we largely don’t have a choice. Just be aware that the coal ash saga is about far more than an ineffective state regulatory agency, a giant utility company and a spill of ash into a river. It’s about the relationship between corporate power and the rest of us. Guess who, like the ash in the river, has settled to the bottom?