Heart of coal: ashes of what made Duke Energy so powerful now smudge its reputation.

• Author: Martin, Edward
• Position: Cover story

Spring peepers and songbirds should be chirping, but there's only silence this bitterly cold morning on the empty hillside 10 miles south of the Virginia line, where a northeast breeze hints of snow as it ripples the broom straw. From here, the rough terrain slopes down to the Dan River, and across it, a mile distant, mist mutes the decommissioned power plant's redbrick bulk. It succumbed two years ago this month, at the age of 64, to cleaner and more efficient technology. Water vapor wafts from a nearby combined-cycle electricity plant, where heat from burning natural gas is used and reused, capturing what was once lost up smokestacks.

The four giant stacks of Duke Energy Corp.'s Dan River Steam Station exhale nothing, idled like the steep conveyors that carried coal to its burners. The ash that was left behind went into a storage basin beside the river, where this morning as many as 200 workers in hard hats, waders and rubber gloves labor. Across a plain of dark-gray ooze, yellow excavators teeter on the edges of gullies deep enough to swallow them. Until recently, this was a 27-acre lagoon, a pond the size of two-dozen football fields. Now, there's only drying ash the texture of loose soil. Until a pipe under the basin ruptured and the Dan River ran gray in early February, few North Carolinians thought that much about coal, though it generates about four of every 10 kilowatts of electricity used at their workplaces and homes. As a threat to their health, few feared it the way they did its electricity-generating cousin, nuclear power.

But coal has a troubled legacy, dark as the 35 million gallons or more of water laced with toxic ash that leaked from this storage pond, causing one of the worst environmental accidents in North Carolina history. "When I went to work at Duke Power in 1963, virtually every office had a picture of a power plant with smoke billowing out of the stacks," retired Duke Energy CEO Bill Grigg recalls. "It was a sign of industry and progress." Coal tugged the state out of its agrarian past, nurturing a $90 billion manufacturing economy that is now the nation's fourth-largest. But its impact also can be traced in skeletons of spruce and fir trees atop lofty Roan Mountain on the Tennessee line. Or in an up-and-coming Charlotte neighborhood where commuters in banker suits, oblivious to tainted soil underfoot, scan tablet computers while waiting for light-rail trains. Or at long-forgotten holes in the ground 110 miles northeast of the Queen City, where men died digging it nearly a century ago. Or in the more than 500 mountains leveled and 2,500 miles of streams obliterated in neighboring states to mine it. Now coal, considered by many a relic of the past, has come back to haunt the state in the form of ash. Stored in lagoons like the two at Dan River, it leaches arsenic, selenium, mercury and other heavy metals and chemicals known to cause cancer and other diseases into the ground and, occasionally, rivers. "We've got these things all over the South--all over the U.S. -and they're ticking time bombs," says Amy Adams, a former North Carolina water-quality regulator.

Scientists say the more than 100 million tons of ash Duke Energy has stored at 14 sites in North Carolina, many 50 or more years old, constitute the largest pollution threat facing the state. Nearly 800,000 people drink Charlotte's water, but just 3 miles upstream from the intake on Mountain Island Lake, 5 billion pounds of ash--four times that at Dan River--is stored at Riverbend Steam Station, which was shut down in 2012. "Dan River got people's attention, but these coal-ash impoundments every minute of every day are contaminating our ground and surface water," says John Suttles, the Chapel Hill-based head of litigation for Charlottesville, Va.-based Southern Environmental Law Center. A colleague concurs. "Until recently this was the big, dirty secret of Duke Energy," says Frank Holleman, the nonprofit's senior attorney.

Coal has even smudged politics with a federal investigation that could result in criminal charges. A grand jury is looking at possible links between Charlotte-based Duke Energy--the nation's largest electric utility--and state regulators. The spill, critics say, exposes the soft spot Duke Energy has with Gov. Pat McCrory, who worked there nearly three decades before making his first run for governor in 2008 after a record 14 years as Charlotte mayor. That unsuccessful bid was followed by his victory in 2012. He and the Republicans who captured both...