Duke Energy

Federal Activity:

Duke Energy is a member of the U.S. Climate Action Partnership, which has been criticized for including member companies that actually worked to derail meaningful climate legislation. During this time, Duke was also a member of the National Association of Manufacturers and the American Coalition for Clean Coal Electricity, each of which worked against action on climate change. In one extreme case, the ACCCE even sent out forged letters to Congress members, claiming to speak on behalf of senior citizens and other groups. Duke Energy finally left the National Association of Manufacturers in May 2009, as well as the ACCCE in September 2009. Duke Energy’s CEO, Jim Rogers, also pulled himself from the board of the staunchly anti-environmentalist U.S. Chamber of Commerce in April 2010, although he claims the switch was mandatory after serving three consecutive terms.

The American Clean Energy and Security Act (ACESA) that passed in the U.S. House in 2009, which included many favors for the coal industry, was encouraged by tens of thousands of dollars in contributions to House members from the political action committees of Duke and other utilities.

Duke Energy has spent about $24 million from 2005-2010 on federal lobbying. As of October 2011, Duke spent 4.8 million on lobbyists for that year, including on the Podesta Group (see Tony Podesta), William Tyndall (one of five former EPA employees now lobbying for the company), and Brian Vanderbloemen, a former legislative assistant to Senator Richard Burr (R- NC). Burr represents Duke’s home state, and Duke is the fifth largest contributor to Burr's 2012 campaign.  Starting in 2010, lobbyists paid with Duke Energy money also included Izzy Klein, former political director for Congressman Ed Markey who is ranking member of the House Natural Resources Committee as well as a member of the Committee on Energy and Commerce. The Duke Energy political action committee (PAC) spent an additional $1.4 million on the 2010 election cycle and as of November 2011 had spent $400,000 on the 2012 election cycle.

Duke Energy is also loaning up to $10 million to the Democratic National Committee to help with the party’s 2012 convention. The convention will be hosted Charlotte, with Jim Rogers serving as head fundraiser for the event. The aid was criticized as an attempt at “currying favor” from Democrats.

As of October 2011, Progress Energy spent 1.4 million on lobbyists for that year—11 million between 2005 and 2010. Progress also hires the lobbying services of the Podesta Group (see Tony Podesta), and lobbyists paid with Progress Energy money include 4 former EPA employees, former Burr assistant Brian Vanderbloemen, and former Ed Markey political director Izzy Klein. The Progress Energy PAC also spent more than $200,000 for the 2012 election cycle as of December 2011, having spent more than half a million during the 2010 cycle.

Environmental Issues:

Half of the coal Duke Energy burns at its power plants comes from mountain top removal operations.

Duke Energy is the third largest emitter of carbon dioxide in the United States at 112,000,000 tons per year and the number 11 emitter worldwide. According to a 2010 study by Clean Air Task Force, Duke’s coal fleet collectively causes more than $7 billion dollars worth of health impacts annually. The number totals nearly $10 billion after adding Progress’ coal fleet.

Despite Rogers’ claims of needing to address climate change, Duke Energy is in the middle of re-constructing two coal-fired power plants in the U.S. (Cliffside and Edwardsport), one of which has become subject to substantial protests.

Duke Energy also faced accusations of double-speak by Greenpeace in December 2011, after the non-profit (and managing organization of this site) highlighted Duke’s conflicting behavior regarding the EPA’s
Mercury and Air Toxics Standards or “Mercury Rule”. Although Duke CEO Jim Rogers had already indicated that Duke’s fleet was prepared to comply with the regulation, Duke was apparently a member of the Electric Reliability Coordinating Council (ERCC), a utility industry group that had actively worked “to delay and weaken much-needed federal mercury protections.”
 

Coal Ash:

As of 2009, Duke Energy owned ten of the EPA’s 44 “high hazard potential” coal impoundment ponds, toxic dams full of watered-down byproducts from burning coal. In North Carolina, 13 coal ash ponds owned by Duke and Progress were found to be leaking neurotoxins and carcinogens into the surrounding groundwater. Levels of arsenic, lead, cadmium and chromium were sometimes found to be more than 380 times greater than state-approved limits.

As of 2009, Duke Energy had three plants operating within a 3-mile proximity of 12,000 people or more, none of which had scrubbers installed to reduce pollution. The per capita income in all three areas was less than $16,000, and one of the plants, the R. Gallagher Generating Station, is noted for being in a community where 60% of the population is composed of people of color. This same plant was also fined $1.75 million by the EPA for violating the Clear Air Act.

Edwardsport Station Controversy:

Duke Energy is currently reconstructing Edwardsport plant in Knox Country, Indiana, into a new coal gasification plant. The region already has more than 4 times the amount of power capacity as is needed, with “one of the highest concentrations of coal-fired generators in the world."

In 2010, the project director for Edwardsport confidentially wrote to Duke complaining of “significant risks” [PDF] the utility had taken on the plant’s construction process.  In another communication, Duke executive Richard Hayiland wrote, “we need an exorcist on this job.”

Originally budgeted for between $1.3 and 1.6 billion, the cost for Edwardsport has swelled to $2.98 billion. Duke Energy was blasted in 2011 by the Indiana Office of Utility Consumer Counselor as the company attempted to push $530 million in Edwardsport costs onto customers. An OUCC director testified that “Duke has not demonstrated any budgetary constraints on this project” and that the “escalating costs have been borne solely by ratepayers, with the benefits going to the [Duke] shareholders.”

As of the posting of this profile, the Indiana Utility Regulatory Commission was in the midst of deciding “whether Duke committed fraud, concealment or gross mismanagement” regarding the plant’s massive cost overruns—nearly a billion more than what was originally approved. Jim Rogers himself testified before the IURC, saying “Yes, [the plant is] expensive. But it will be the cleanest plant in Indiana.” Meanwhile, Duke Energy paid a consultancy more than $3 million dollars to testify on the issue.

The Edwardsport project has also stirred controversy regarding Duke’s relationship with the Indiana Utility Regulatory Commission. Reports by The Indianapolis Star revealed that in early 2010 Duke CEO Jim Rogers and Vice President James Turner held private meetings with IURC chair David Hardy and Indiana Governor Mitch Daniels to warn of some of the new costs associated with the construction of Edwardsport.

While Duke Energy argued that the meetings were merely a “courtesy heads-up,” other correspondence between Turner and Hardy and between Turner and Rogers raised concerns that Duke may have violated the law by attempting to influence the course of IURC decisions on Edwardsport. During the course of email correspondence between Hardy and Turner, Turner offered to host Hardy and his wife on Turner’s private boat, and even hinted that Hardy could find employment at Duke should he rule favorably toward the company. According to the Indianapolis Star, Turner also communicated to Rogers that “he intended to give plenty of attention to the Edwardsport plant and try to shift costs away from the utility.”

Turner resigned from Duke Energy in the wake of The Indianapolis Star’s reporting. Governor Daniels fired Hardy--although for a matter that was different but also involving Duke.