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June 26, 2022

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Utility sues over coal ash cleanup

Duke Energy wants help paying billions in costs

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RALEIGH, N.C. — The largest U.S. electric company sued 30 international and domestic insurance companies Wednesday, saying they should cover part of the utility’s multibillion-dollar cleanup costs in the Carolinas for toxic byproducts left from decades of burning coal to generate power.

Charlotte-based Duke Energy Corp. said it filed a lawsuit in state court alleging breach of contract by insurers that have refused to pay claims that could total hundreds of millions of dollars.

Duke Energy said the companies were paid to provide general liability coverage to its operating subsidiaries in North Carolina and South Carolina, and their predecessor companies. The policies date from between the early 1970s and mid-1980s, and were purchased to protect utility customers from unexpected costs, it said.

In a separate federal lawsuit also filed Wednesday, a Bermuda-based insurer said Duke Energy’s predecessors had years ago tried and failed to get it to pay for coal ash liabilities, and it’s now too late to go to court. Associated Electric & Gas Insurance Services Limited did not describe in its lawsuit why it refused separate claims for payment in 1996 tied to coal ash costs by Duke Energy’s two predecessor companies, which merged in 2012.

Duke Energy has estimated its liability for cleanup and storage efforts at about $4.2 billion. The utility had spent more than $725 million through November.

The utility is expected to ask North Carolina regulators for rate increases this year that include cleanup costs passed along to its customers. Money recovered from insurers would reduce the price tag for consumers, the company said.

Coal ash contains arsenic, lead, mercury and other elements that “may be hazardous in sufficient quantities or concentrations,” Duke Energy lawyers wrote in their lawsuit. Environmentalists and state regulators have alleged those heavy metals have been draining through the unlined bottoms of pits where liquefied coal ash has been stored for decades.

Duke Energy said it stored coal ash in line with industry practices and regulations that were in place over preceding decades.

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