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Deciding who’ll pay for coal ash disposal

RALEIGH — It didn’t take long for the real debate to begin regarding Duke Energy’s 31 coal ash ponds at 14 sites around North Carolina.
As I noted in this column almost a month ago and shortly after the massive coal ash spill into the Dan River, any idea that Duke could leave these pits of coal ash near rivers that serve as sources of drinking water disappeared the moment that a pipe at a recently-closed power plant near Eden collapsed and the spill ensued.
The more significant debate at that point became a simple one: Who will pay to move the coal ash?

Duke CEO Lynn Good said almost immediately after the spill that the company and its shareholders would pay for the cleanup along the Dan River.
That should come as no surprise. Management decisions and management neglect, even if accompanied by policy and regulatory failures at the state and federal level, are ultimately responsible for the spill.
The bigger and more costly question is how the costs of moving and disposing of the coal ash from reservoirs around the state will be meted out, how much of the tab will be apportioned to shareholders and how much to Duke customers.
Good indicated that cost should be borne by customers.
Politicians quickly weighed in.
State Attorney General and potential 2016 gubernatorial candidate Roy Cooper said Duke’s shareholders should pick up the cost. Gov. Pat McCrory accused Cooper of politicizing the issue and said the state Utilities Commission, which already determines how state-regulated utilities’ costs are apportioned, should decide.
Two state legislators who head up a regulatory review panel had different answers too. Rep. Mike Hager, a Rutherfordton Republican and former Duke engineer, said his aim is to keep the costs off of ratepayers. Rep. Ruth Samuelson, a Charlotte Republican, said shareholders and customers should share costs.

In a perfect world, McCrory is probably right.
The Utilities Commission and the rules that determine how costs are apportioned among customers and shareholders, in theory, ought to be the basis for determining how the coal ash disposal costs are paid as well.
The law, though, doesn’t always operate as well in practice as it does in theory, and it may well tie the hands of the Utilities Commission in ways that it might not have if Duke and its predecessor companies had been dealing with coal ash disposal all along.
Whether costs might have been apportioned differently under different sets of rules and laws that applied in the past, when the coal ash was piling up, is one complicating factor to consider.
Another is whether the management decisions by Duke and its predecessors regarding coal ash have caused the costs of disposing of the stuff to escalate. If so, the price of those decisions should be paid by the company owners (shareholders) who hired those managers.
If the Utilities Commission cannot or won’t consider costs within that context, the General Assembly should step in.
Scott Mooneyham writes about state issues for Capitol Press Association.

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