The U.S. Justice Department has opened a criminal investigation into the state environmental agency tasked with regulating Duke Energy after a coal ash spill left the Dan River so polluted that people were advised to avoid contact with the water.
The probe, environmentalists say, might also open a window into the relationship that state regulators have with the country’s largest electricity provider, a company that also was a 28-year employer of Gov. Pat McCrory.
Subpoenas were issued this week summoning officials from the N.C. Department of Environment and Natural Resources and Duke Energy to produce records before a federal grand jury scheduled to meet in Raleigh March 18-20.
The subpoenas demand that DENR provide regulatory documents, including any correspondence with Duke since January 2010.
Thomas Walker, the U.S. Attorney for the Eastern District of North Carolina, said Thursday he could not comment on specific targets of an investigation.
But since his appointment to the post in 2011 by President Barack Obama, Walker has been committed to pursuing polluters in an effort to protect the state’s scenic and natural resources. His office has won rulings against hog farmers that resulted in criminal sentences and civil penalties.
A letter signed by Walker attached to the subpoena that went to DENR states: “An official criminal investigation of a suspected felony is being conducted by the United States and a federal grand jury.”
Officials at Duke Energy and DENR had little to say publicly about the criminal probe.
Drew Elliot, a DENR spokesman, said in a statement Thursday that there would be no comment further than: “The Department of Environment and Natural Resources will cooperate in this matter.”
McCrory’s general counsel, Bob Stephens, issued a similar statement.
Tom Williams, a Duke spokesman, confirmed that the company had received a subpoena and added: “Duke Energy will continue to cooperate with any state or federal agency that might undertake an investigation of the Dan River ash release.”
John Skvarla, a Raleigh businessman appointed secretary of the N.C. Department of Environment and Natural Resources by McCrory, has described his approach to running the state agency as being “a partner” to those it regulates and having a staff with a “customer-friendly” approach.
Questions about the relationship between state environmental regulators and Duke have increased in recent weeks after a coal ash spill from the company’s Dan River Steam Station near Eden turned the river gray and murky for miles.
On Feb. 2, a security guard patrolling the grounds of the station discovered that a pipe running under a 27-acre toxic waste pond had collapsed.
The company reported that up to 82,000 tons of coal ash mixed with 27 million gallons of contaminated water drained into the Dan River, a waterway that is a drinking water source for several cities and towns in Virginia, as well as Roanoke Rapids in North Carolina. This week Duke lowered its estimate about how much coal ash seeped into the river to 39,000 tons.
It was not until the following day that the public was told about the breach. Initial reports provided by Duke and DENR failed to disclose the massive scale of the problem – one that has been described as the third largest such coal ash spill in the nation.
Tests by the state Department of Environment and Natural Resources since the spill have found arsenic, copper, iron and aluminum in the river at levels above state standards for surface water quality. McCrory has said it appears that the water is safe to drink.
On Wednesday afternoon, the public health division of the state Department of Health and Human Services released two health advisories related to the spill, saying “a potential hazard exists immediately downstream of the release,” that people should avoid recreational contact with water and sediment from the river downstream of the spill, and that they should not touch submerged or floating coal ash or ash that has washed up on the riverbank.
On Thursday, DENR officials reported that the agency was investigating a discharge of wastewater to the Dan River from an emergency piping system Duke installed Feb. 9 in response to the coal ash spill.
The utility reported that no coal ash was in the wastewater discharge.
Over the past year, environmental groups have tried on at least three occasions to use the federal Clean Water Act to force Duke to clean out leaky coal ash dumps.
The Clean Water Act allows such groups to file lawsuits over environmental violations, but it requires them to give 60-days’ notice to state regulators to take enforcement action before the case can proceed in the courts.
In each case, according to the environmental groups, state regulators waited days before the deadline before filing enforcement actions against Duke, blocking or delaying their legal challenges.
Frank Holleman, a senior attorney with the Southern Environmental Law Center, said Thursday that he welcomed the federal investigation.
“This is as serious as it gets,” Holleman said.
Through the past year, he has seen lawsuits filed by environmental groups be blocked by the state agency and seen violation notices result in fines for the utility but no requirements for cleanup or long-term remedies.
The law center has sought documents from the state and Duke about a recent settlement. Holleman said the state had provided some of the documents and the utility had “stonewalled” the law center.
“Now it’s going to be a lot harder to stonewall a grand jury,” Holleman said.
News of the federal criminal investigation into DENR and Duke spread quickly among environmental organizations.
Amy Adams, N.C. campaign coordinator for Appalachian Voices, issued the following statement: “While Duke Energy and DENR have clearly been shirking their responsibilities to adhere to environmental practices that would have protected the Dan River, a federal investigation raises the stakes considerably. We’ll be watching the process closely and, like citizens in North Carolina and Virginia who have been impacted by the coal ash spill, we’re eager to find out what was truly going on that caused this crisis.”