A group of Duke investors push to out directors

Duke Energy Corp. shareholders should vote against four board members for lapses that led to a February coal-ash spill that fouled a North Carolina River, the California Public Employees’ Retirement System and New York City Comptroller Scott Stringer said.

The four directors – G. Alex Bernhardt Sr., James B. Hyler Jr., James T. Rhodes and Carlos Saladrigas – “have failed to fulfill their obligations of risk oversight as members of a committee overseeing health, safety and environmental compliance at the company,” Anne Simpson, senior portfolio manager for the California system, and Stringer wrote in a letter filed Tuesday with the U.S. Securities and Exchange Commission.

About 39,000 tons of ash spilled Feb. 2 from a pond at a shuttered coal-fired power plant near Eden, N.C., triggering investigations and subpoenas. The incident, the third-largest coal-ash spill in the U.S., coated 70 miles of the Dan River, according to the letter.

Shares of Duke Energy, the predominant utility serving Greater Cincinnati and Northern Kentucky, have become the worst performer on the 13-company Standard & Poor’s 500 Electric Utility Index since the spill became public. Shares closed Tuesday at $72.81, up 74 cents on the day.

A federal grand jury is probing North Carolina’s oversight of the company’s 33 coal-ash ponds in that state. Gov. Pat McCrory, a former Duke employee, has asked the company to remove coal from riverbanks to prevent a recurrence.

The state regulator, the Department of Environmental and Natural Resources, last month cited Duke for violating pollution permits when it pumped 61 million gallons of coal-ash pond wastewater into a tributary of the Cape Fear River. The state is also seeking to revive lawsuits filed last year over pollution from ponds at two plants. Duke has denied the permit violations.

The California retirement system and the New York City pension funds own a combined 3.9 million shares in Duke.

The Charlotte, N.C.-based company had no immediate comment on the letter.

“The board’s silence has been deafening in the lead up to and aftermath of the Dan River spill,” Stringer, a Democrat, wrote in an email. “We intend to hold accountable those directors most responsible for these costly oversight failures.”

The annual meeting is scheduled May 1. Bernhardt has been on the board for 23 years and Rhodes for 12. Saladrigas and Tyler, who joined as part of Duke’s acquisition of Progress Energy Inc., have been board members for 13 and 6 years, respectively.

Duke is the largest utility owner in the U.S. ■