Material Handling

South Carolina regulators reject Duke Energy’s coal ash cost recovery request

The utility sought to recover approximately $238 million from 2018 closing coal ash basins in South Carolina and North Carolina, along with $36 million of previously disallowed costs from a 2018 rate case.
South Carolina regulators reject Duke Energy’s coal ash cost recovery request
(Duke Energy's Belew's Creek coal-fired plant. Source: Duke Energy.)

The Public Service Commission of South Carolina (PSCSC) rejected Duke Energy’s request to recover coal ash-related costs while approving new rates for customers in the state.

Duke Energy Carolinas had requested to recover approximately $238 million spent from 2018 to 2023 on closing coal ash basins in South Carolina and North Carolina. Additionally, the utility sought to recover $36 million of previously disallowed costs from a 2018 rate case.

Duke’s coal ash surface impoundments include 13 basins located at coal-fired plant sites: two basins at  W.S. Lee in South Carolina; and the Marshall Ash Basin, the Unit 5 inactive and active basins at Cliffside, the active basin at Belews Creek, retired and active basins at Allen, two basins at Dan River and three basins at Buck, all in North Carolina.

Duke argued that changes in federal regulations had justified its cost-recovery request. Specifically, the utility argued that a January 2022 clarification by the U.S. Environmental Protection Agency (EPA) made federal regulations similar to North Carolina’s stricter Coal Ash Management Act (CAMA). The company contended that because costs mandated by federal regulations are recoverable, the CAMA-related costs should also be recoverable.

However, South Carolina regulators upheld their previous decision, denying recovery of the $36 million previously disallowed and the additional $238 million sought by DEC. PSCSC maintained that costs associated with CAMA, which are stricter than federal coal ash regulations, remain unrecoverable. Regulators said this position was supported by the South Carolina Supreme Court in the previous 2018 rate case.

PSCSC emphasized that future similar costs are only recoverable if they are consistent with and mandated by federal law, setting a clear standard for how utilities should approach cost recovery for environmental compliance in the future.

Coal ash is a byproduct of burning coal in power plants that, without proper management, can pollute waterways, groundwater, drinking water and the air. Coal ash contains contaminants like mercury, cadmium, chromium, and arsenic associated with cancer and various other serious health effects.

In April the EPA finalized a rule requiring the safe management of coal ash placed in areas that were unregulated at the federal level until now. This includes inactive power plants with surface impoundments that are no longer being used and historical coal ash disposal areas at active power plants. The rule applies to historical contamination and inactive units that no longer support current power plant operations. It is not expected to affect current power plant operations.

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