The North Carolina Department of Environment and Natural Resources (DENR) knew since at least last August that Duke Energy was illegally polluting the Dan River with coal ash, yet the agency did nothing about it.

That inaction proved to be disastrous, when seven months later, Duke Energy employees discovered the utility’s coal ash pond in Eden was leaking 30,000–39,000 tons of coal ash and contaminated material into the river, the third-largest such accident in North Carolina history.

In the weeks following the Feb. 2 spill, Duke Energy and DENR, under Gov. Pat McCrory—previously a 28-year employee of the utility—have come under federal investigation. The details of that investigation have not been released, but close observers think the probe will focus on how DENR used the federal Clean Water Act to run interference for Duke Energy.

“The Clean Water Act delegates responsibility and authority to this agency to enforce the law,” DENR Secretary John Skvarla said at a press conference last Wednesday, adding that DENR didn’t hesitate to “initiate action.”

However, DENR’s own data, collected from 2011–2013, shows that the groundwater near Duke Energy’s Dan River plant had been contaminated with toxic coal ash but the agency did nothing about it. Meanwhile, it used legal maneuvers to prevent citizens groups from suing the utility.

“They could have let us file and we could have worked together but he scrambled to prevent us from bringing our own lawsuit,” said Frank Holleman, an attorney with the Southern Environmental Law Center , which tried to sue Duke Energy under the Clean Water Act three times, only to be thwarted by DENR. “They did everything they could to hinder our ability to be effective.”

DENR officials stated in August that they knew about “unpermitted seeps”—direct flows of polluted water into the Dan River at Duke Energy’s Combined Cycle Station in Eden—according to court documents.

And from 2011 to 2013, the agency’s own sampling showed levels of antimony, arsenic and boron that exceeded federal health standards.

Holleman of the SELC said that during court proceedings DENR acknowledged that if the violations were not corrected they posed a “serious danger” to the health, safety and welfare of the people of North Carolina and could cause “serious harm” to the water resources of the state.

“The Division of Water Resources staff is working with [Duke Energy],” court documents state, “to determine if these exceedances are naturally occurring or if corrective action will be required.”

Instead of requiring corrective action, DENR negotiated a consent agreement with Duke Energy to pay a $60,200 fine for coal ash pollution at its Asheville site and another $38,911 for its Riverband/Mountain Island Lake location.

In addition, the penalty did not include any clean-up provisions or conditions that the company change how it stores toxic substances.

To put this into context, Duke Energy reported earnings of $2.68 billion last year. The largest water quality fine DENR has recently imposed is $184,000 on the Onslow Water and Sewer Authority in November 2011, according to the agency’s online enforcement database.

It was only after the Dan River spill earlier this month that DENR asked a judge to withdraw the consent agreement with Duke. Coincidentally, this happened on the same day news broke that U.S. attorneys were launching a criminal investigation into the incident. There has not yet been a ruling.

According to DENR communications director Drew Elliot, who is a former employee of Duke Energy subsidiary Progress Energy, the DENR decided to pull the consent agreement before learning the first subpoena had been issued for the federal investigation.

“Any implication or allegation that DENR and Duke Energy got together to make some smoky, backroom deal with a nominal fine is just not true,” Skvarla said at the press conference.

When citizens groups were trying to sue Duke Energy during the prelude to the Dan River spill, DENR pushed the limits of the Clean Water Act in the utility’s favor. The Clean Water Act allows state environmental agencies and citizens to sue companies, but with one caveat: The plaintiff has to notify the state of its intent to sue the polluter, and to give the defendant 60 days’ notice to clean up the pollution.

Within that 60 days, if the state also sues the company, the citizens’ role in the lawsuit is limited.

Against that legal backdrop, the DENR-Duke deal started more than a year ago. On Jan. 24, 2013, the SELC sent a 60-day notice to DENR and Duke Energy of their intent to sue the company under the Clean Water Act on behalf of the Sierra Club, the Waterkeeper Alliance and the Western North Carolina Alliance, over coal ash pollution at the facility in Asheville.

In late March, on Day 57, DENR filed its own complaint against Duke Energy at the Asheville facility, thus cutting off the SELC.

In March, the SELC filed a second notice of intent to sue Duke Energy on behalf of the Catawba Riverkeeper Foundation, for pollution at the Mountain Island Lake facility in Riverbend. Again, in late May, on Day 59, DENR filed suit against Duke Energy for pollution at the same facility, again thwarting the SELC.

On June 19, the SELC filed a third notice of intent to sue for pollution at Duke Energy’s Sutton lake facility in Wilmington.

On July 3, attorneys for the state representing DENR asked a judge to limit the participation of conservation groups in the agency’s lawsuit against Duke Energy.

At that hearing, Duke Energy attorneys told the court about the SELC’s third notice of intent to sue. They complained that Duke would likely receive a total of 14 such notices, one for each site in the state.

In an attempt to preempt more citizen filings, DENR filed suit against Duke on the utility’s 11 remaining coal ash ponds in North Carolina. One of them was the Dan River site.

DENR and Duke Energy rushed to negotiate a settlement.

Citizens’ groups got a break on Aug. 9, when Wake County Superior Court Judge Paul Ridgeway granted them the right to intervene in DENR’s complaint against Duke Energy as full parties. Even so, a spokesperson for the SELC said, “DENR has resisted citizen conservation group participation every step of the way. DENR is legally barred from objecting to our intervention, but it refused to consent. Even then, its attorney attempted to limit our participation in oral argument at the intervention hearing.”

Despite overwhelming public opposition, DENR submitted its proposed settlement to Court for approval Oct. 4—and there it stalled until the Dan River spill in early February.

DENR became responsible for regulating coal ash in 2009, after a massive spill in Kingston, Tenn., brought the issue to the public’s attention. In 2010, all coal ash ponds were found to be in compliance with North Carolina statutes, according to Skvarla.

Skvarla has said that until McCrory appointed him as DENR secretary in January 2013, no citizen or government agency has taken enforcement action on coal ash pollution in North Carolina.

Yet the SELC has been doing coal ash litigation work in the Carolinas since 2011, before the Skvarla appointment. Last year in South Carolina, the SELC sent a notice of intent to sue to Santee Cooper and to that state’s Department of Health and Environmental Control, for coal ash pollution in one of the utility’s facilities.

Unlike North Carolina, South Carolina did not file suit within the 60-day period; the SELC sued Santee Cooper. As part of a settlement, Santee Cooper agreed to remove its coal ash from 12 storage lagoons and put it into lined landfills or recycle it.

According to Holleman, of the three major utilities companies in North and South Carolina that store coal ash—Santee Cooper, SCE&G and Duke—the former two have agreed to remove their coal ash from unlined ponds located near rivers and store it in lined landfills or recycle it.

Only Duke Energy has refused.

Duke Energy has already proposed its own low-cost method for dealing with coal ash ponds: Leave the coal ash in place, even if it is near waterways and reservoirs, and simply cap it off. Skvarla said Duke needed a year of due diligence to investigate other alternatives. Last week, Paige Sheehan, a Duke Energy spokeswoman, acknowledged the utility is reviewing how the utility disposes of the coal ash waste.

“We agree that ash basins need to be addressed and we’re taking another look at the best way to approach that work,” Sheehan said.

Skvarla—who has cast doubt on the accepted science behind climate change—said he is skeptical about whether the method of removing coal ash to be stored in lined landfills is the best way to deal with coal ash pollution.

“Some scientists say that is the worst thing that could happen to the environment,” Skvarla said. “The answer is nobody knows.”

For a more updated version of How DENR ran interference for Duke Energy and let the Dan River spill happen, please visit the article posted on Wednesday, February 26th.