Duke Energy should use stock dividends to pay for $4 billion NC coal ash cleanup

Please do not give North Carolina Attorney General Josh Stein a congratulatory slap on the back. And do not thank the public staff of the North Carolina Utilities Commission or the representatives of the Sierra Club for saving customers of Duke Energy $1.1 billion over a 15-year period. This is not the time to praise Caesar.

Duke Energy customers now saddled with paying $2.9 billion instead of the overall $4 billion cost of cleaning up the coal ash mess generated by the monopoly utility should be furious at all three parties in the recently negotiated settlement with Duke. Caesar (the three parties) should be buried for the $2.9 billion bale out given to the perpetrator.

Being asked—rather, being told—we are to pay the entire amount and then getting a reduction of more than 25 percent of the total expenditure is ridiculous, a highway robbery, no matter how the Utilities Commission reacts to this egregious agreement with Duke Energy.

The Duke Energy stockholders should be paying for the disaster Duke Energy, along with Progress Energy (Carolina Power and Light), created in the first place. Customers in the Duke Energy service area have little if any choice when it comes to tapping into the electric grid. It is with Duke Energy or no energy.

Saddling stockholders (of which I may be one through mutual fund investments in my retirement account) to pay the entire cost of the cleanup would not be a burden to any stockholder or to Duke Energy. The numbers do not lie. The total annual dividend Duke Energy pays its stockholders is shocking.

There are approximately 734 million (734,000,000) outstanding shares of Duke Energy stock. In the calendar year 2020, Duke Energy paid its stockholders average quarterly dividends of $.955 per share which is $3.82 per share for the year. You do the figuring: 735,000,000 x $3.82 = $2,803,880,000, or more than $2.8 billion in dividends in 2020. Am I wrong? The numbers do not lie.

Duke Energy wants its customers to pay $2.9 billion over a 15-year period (2015-2030) instead of taking from the stockholders’ dividends. If Duke would reduce the current dividend level by 14.5 percent over the next 10 years, there would be more than $4 billion not paid to investors. The math:  {[($3.82 current annual dividend x 14.5%) = $.554 dividend reduction] x 734,000,000 shares = $406,636,000 per year} x 10 years = $4,066,360,000 or $4.07 billion.

There is the $4 billion Duke Energy needs, the total cost of taking care of the temporary coal ash problem which will probably have to be addressed again in years to come. The $.14 quarterly dividend reduction would not be missed by a single shareholder.

Duke Energy needs to be a good corporate citizen and request a return to the negotiating table, revisiting the laughable and sad settlement made in conjunction with AG Stein, the Utilities Commission public staff, and the Sierra Club. The four parties deserve no credit from Duke Energy consumers. The three did little to help the consumer. Burying Caesar, instead of praising him, is the right thing to do.