Duke Energy, the company responsible for a massive coal ash spill in North Carolina in January, raked in billions in revenue in the first quarter of 2014 but failed to spend more than a tiny fraction of its earnings on cleaning up its spill, according to its quarterly report released Wednesday.
The company, the largest electrical utility in the United States, has also seen what one Duke stock owner called a “shareholder revolt” over a reluctance to provide more detailed disclosure of its political contributions. Duke denies there’s a mutiny, saying that management’s preference for less disclosure is supported by a majority of shareholders.
Duke Energy, valued at about $51 billion, said it spent just $15 million cleaning up the results of the coal ash leak, a figure dwarfed by its $6.62 billion in revenue in the first quarter of 2014.
“What’s clear is that they spent very little money so far and they have not done a lot to clean up,” Frank Holleman, an attorney with the Southern Environmental Law Center, told Al Jazeera. The center is leading a lawsuit against Duke over the coal ash spill.
“I think overall what we’ve seen in this report is a very rich organization,” Holleman said. “There’s absolutely no question that they can afford to do the right thing on coal ash.”
The January spill of thousands of gallons of arsenic-laden coal ash into the Dan River from a defunct power plant in Eden, North Carolina, brought Duke under increased scrutiny from environmental groups and federal prosecutors, who have subpoenaed documents related to the spill from both the company and state environmental regulators as part of a criminal investigation into the accident.
“I am proud of the way our team responded to challenging events in the first quarter — the severe winter weather and the Dan River coal ash release,” said Lynn Good, Duke Energy’s president and CEO, in a press release Wednesday.
While there will be more cleanup costs to come, Good said she does not expect them to be large enough to materially affect overall results.
The quarterly report, however, tells investors the company’s bottom line could be affected in the future by laws or rules concerning everything from climate change to the Dan River spill and new coal ash rules.
Meanwhile, 33 of Duke’s coal ash ponds remain in North Carolina, and environmental advocates say toxins from the ponds seep into the soil. Duke says they could cost as much as $10 billion to fix.
Some of Duke's shareholders aren't happy about its environmental record and want the company to increase transparency — especially of its employees’ political contributions and those of DUKEPAC, its political action committee.
Bill Dempsey, chief financial officer at the Nathan Cummings Foundation, which holds Duke stock worth about $400 million, said his group campaigned for a proposal to raise the company's reporting requirements.
“We ended up with a 49 percent vote in favor of the company starting to disclose their political spending,” said Dempsey.
“The reason this is relevant to the spill is that there’s a variety of investigations underway because the company had a variety of political relationships that may have contributed to this coal ash disaster,” Dempsey told Al Jazeera, referring to reports of a cozy relationship between Duke and the North Carolina Department of Environment and Natural Resources.
Duke spokesman David Scanzoni said that Dempsey’s figures are wrong, and that only 42.5 percent of shareholders voted in favor of the expanded political contribution reporting rules.
Voting was done electronically in the weeks leading up to a final tally on May 1.
The shareholders’ proposal (PDF, page 71) for more disclosure says the move would help avoid “reputational and business risks” from a lack of transparency, but notes that the company already files its donations with federal election authorities. More paperwork of this kind would be “duplicative and unnecessary,” according to a document provided to voting shareholders.
Duke has told investors (PDF) that it is going to great lengths to investigate the spill.
Scanzoni echoed that point, saying, “Duke Energy does disclose through federal election reports and other documents. It’s already disclosed.”
But Dempsey says that less disclosure will be bad for Duke in the long run, and that he hopes the company will conduct an independent review of the Dan River spill. His charitable foundation relies on the health of the stock, and Dempsey says he wants Duke to make the right choices.
“They need to restore confidence and have independent investigation,” he said.
Meanwhile, Duke’s stock price went up by 1 percent on the report’s release Wednesday, rising to $73.61 a share.
With wire services