Shareholders tell Duke to clean-up its act

Duke Energy Corp.(NYSE:DUK) 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.

“The board was well aware of the company’s longstanding violations, yet failed to take any meaningful action to prevent further harm,” the shareholders said. “Instead, the board caused or allowed Duke Energy to operate without proper permits, continuously pollute the environment, and fail to properly inspect the company’s coal ash ponds.”

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 state’s oversight of the company’s 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 decades.

‘Lawless Culture’

Duke’s board created a “lawless culture” at the Charlotte, North Carolina-based company that allowed widespread acceptance of environmental abuse, the shareholders alleged. The lawsuit names Lynn Good, Duke’s chief executive officer, Keith Trent, the company’s chief operating officer, and 14 current directors.

Tom Shiel, a Duke Energy spokesman, didn’t immediately return a phone call seeking comment on the complaint

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).


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