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Coal ash spill reveals transformation of North Carolina agency

RALEIGH, N.C. – Last June, state employees in charge of stopping water pollution were given updated marching orders on behalf of North Carolina’s new Republican governor and conservative lawmakers.

“The General Assembly doesn’t like you,” an official in the Department of Environment and Natural Resources told supervisors, who had been called from across the state to a drab meeting room here. “They cut your budget, but you didn’t get the message. And they cut your budget again, and you still didn’t get the message.”

From now on, regulators were told, they must focus on customer service, meaning issuing environmental permits for businesses as quickly as possible. Big changes are coming, the official said, according to three people in the meeting, two of whom took notes. “If you don’t like change, you’ll be gone.”

But when the nation’s largest utility, Duke Energy, spilled 39,000 tons of coal ash into the Dan River last month, those big changes were suddenly playing out in a different light. Federal prosecutors have begun a criminal investigation into the spill and the relations between Duke and regulators at the environmental agency.

The spill, which coated the river bottom 70 miles downstream and threatened drinking water and aquatic life, drew wide attention to a deal that the environmental department’s new leadership reached with Duke last year over pollution from coal ash ponds. It included a minimal fine but no order that Duke remove ash – the waste from burning coal to generate electricity – from its leaky, unlined ponds near drinking water. Environmental groups said the arrangement protected a powerful utility rather than the environment or the public.

Current and former state regulators said the watchdog agency, once among the most aggressive in the Southeast, has been transformed under Gov. Pat McCrory into a weak sentry that plays down science, has abandoned its regulatory role and suffers from politicized decision-making.

The episode is a huge embarrassment for McCrory, who worked at Duke Energy for 28 years. And it has become yet another point of contention in North Carolina, where Republicans who took control of the General Assembly in 2011 and the governor’s mansion last year have passed sweeping laws in line with conservative principles. They have affected voting rights and unemployment benefits, as well as what Republicans called “job-killing” environmental regulations.

Critics say the accident, the third-largest coal ash spill on record, is inextricably linked to the state’s new environmental politics and reflects an enforcement agency led by a secretary who suggested that oil was a renewable resource and an assistant secretary who, as a state lawmaker, drew a bull’s-eye on a window in his office framing the environmental agency’s headquarters.

“They’re terrified,” said John Dorney, a retired supervisor who keeps in touch with many current employees.

Duke has apologized for the Dan River spill and says it is now committed to cleaning up some of its 32 coal ash ponds.

A spokesman for McCrory said the governor had no role in the state’s proposed settlement with Duke. On Tuesday, amid continuing concerns about future spills, he took a tougher stance, writing to Duke’s chief executive that he wanted the waste ponds, to be moved away from the state’s waterways.

The environmental agency’s embattled secretary, John E. Skvarla III, a McCrory appointee, pushed back last week on criticism of last year’s deal, under which the $50 billion company was fined only $99,111 for leaks from coal ash ponds at two power plants.

The fine was determined by a formula in the law, he said.

But current and former agency employees said the treatment of Duke was typical of the pro-industry bias now in place under McCrory, Skvarla and the General Assembly.

Midlevel supervisors at the agency, who now serve at the pleasure of the governor, say they are hesitant to crack down on polluters who might complain to Skvarla. Several spoke anonymously out of fear of being fired.

The agency took action against Duke only after environmental groups filed notice that they intended to sue the utility.