Duke Energy 2014 Annual Report Download - page 45

PART I
25
OTHER
Duke Energy owns approximately 5.2 million square feet and leases 2.9 million square feet of corporate, regional and district offi ce space spread throughout its
service territories and in Houston, Texas.
ITEM 3. LEGAL PROCEEDINGS
For information regarding legal proceedings, including regulatory and
environmental matters, see Note 4 to the Consolidated Financial Statements,
“Regulatory Matters” and Note 5 to the Consolidated Financial Statements,
“Commitments and Contingencies – Litigation” and “Commitments and
Contingencies – Environmental.”
Virginia Department of Environmental Quality Civil Enforcement
Duke Energy Carolinas and the Virginia Department of Environmental
Quality are in negotiations regarding civil enforcement against Duke Energy
Carolinas related to the February 2, 2014, coal ash release from Duke Energy
Carolinas’ Dan River Steam Station. Monetary sanctions in excess of $100,000
appear likely.
Brazilian Transmission Fee Assessments
On July 16, 2008, Duke Energy International Geracao Paranapanema S.A.
(DEIGP) fi led a lawsuit in the Brazilian federal court challenging transmission
fee assessments imposed under two new resolutions promulgated by the
Brazilian electricity regulatory agency (ANEEL) (collectively, the Resolutions).
The Resolutions purport to impose additional transmission fees on generation
companies located in the State of Sao Paulo for utilization of the electric
transmission system. The fees were retroactive to July 1, 2004, and effective
through June 30, 2009. DEIGP’s original assessment under these Resolutions
amounts to approximately $56 million inclusive of interest through December
2014. Pending resolution of this dispute on the merits, DEIGP deposited the
disputed portion, approximately $19 million, of the assessment into a court-
monitored escrow, and paid the undisputed portion to the distribution companies.
In a decision published on October 2, 2013, the trial court affi rmed an additional
fi ne imposed by ANEEL in the amount of $9 million for DEIGP’s failure to pay
the disputed portion of the assessment. The $9 million was also deposited
into a court-monitored escrow. In December 2014, the trial court ruled in favor
of DEIGP on the merits of the original assessment. The merits of the original
assessment and fi ne, as well as the contradiction between the trial court’s ruling
in favor of DEIGP on the original assessment but against DEIGP on its alleged
failure to timely pay that assessment, will be addressed on appeal.
Brazilian Regulatory Citations
In September 2007, the State Environmental Agency of Parana (IAP)
assessed seven fi nes against DEIGP, totaling $15 million for failure to comply
with reforestation measures allegedly required by state regulations in Brazil.
DEIGP has challenged the fi nes in administrative and judicial proceedings. Two of
the seven fi nes have subsequently been dismissed or otherwise resolved in favor
of DEIGP. A third fi ne was determined legitimate by the trial court, but is under
appeal. The remaining fi nes are pending.
Additionally, DEIGP was assessed three fi nes by Brazil Institute of
Environment and Renewable Natural Resources (IBAMA) for improper
maintenance of existing reforested areas. One of these fi nes was determined
legitimate by the trial court and is under appeal. The others are pending. The
total current IBAMA assessment is approximately $500,000. DEIGP believes that
it has properly maintained all reforested areas and has challenged the IBAMA
assessments.
Gibson Notice of Violations
Pursuant to Notices of Violation dated June 23, 2011 and July 16, 2013,
the EPA has asserted that, on several occasions between August 1, 2008
through March 31, 2013, Duke Energy Indiana’s Gibson steam station violated
opacity limits contained in its Title V permit. Duke Energy Indiana entered into a
settlement agreement with the EPA in the fourth quarter of 2014, which required
payment of a civil penalty of $199,000.
ITEM 4. MINE SAFETY DISCLOSURES
This is not applicable for any of the Duke Energy Registrants.