— Duke Energy says it plans to begin dredging coal ash out of a North Carolina river on Tuesday as the state's environmental agency moved to scuttle a previously proposed settlement with the company over pollution leaking from waste dumps at its power plants.

Lawyers for the state Department of Environment and Natural Resources asked a judge late Monday to disregard its own proposed settlement with the nation's largest electricity provider. Under the deal, Duke would have paid fines of $99,111 for pollution that leaked from two coal dumps like the one that ruptured Feb. 2, spewing out enough toxic sludge into the Dan River to fill 73 Olympic-sized pools. The deal proposed over the summer covered plants near Asheville and Charlotte, while this month's spill was near the town of Eden.

The state dumped the settlement one day after a story by The Associated Press in which environmentalists criticized the arrangement as a sweetheart deal aimed at shielding Duke from far more expensive penalties the $50 billion company might face under the federal Clean Water Act.

The settlement would have required Duke to study how to stop the contamination, but included no requirement for the company to actually clean up the dumps near Asheville and Charlotte.

Gov. Pat McCrory said Tuesday a new "multidisciplinary task force" would be created at the environmental agency within the next 30 days to access all 31 of Duke's coal ash dumps in the state.

"We need a comprehensive plan to address the future of coal ash in North Carolina, and we need to make sure we have all available resources to respond to this situation, including the knowledge we have gained during our environmental assessment and investigation into the spill of the coal ash into the Dan River," said McCrory, a Republican who worked at Duke Energy for 28 years.

State Sen. Tom Apodaca, R-Henderson, said he plans to file legislation this spring that would require Duke to clean up 14 coal ash pits around North Carolina.

On the afternoon of Feb. 2, a security guard patrolling the grounds of Duke's Dan River Steam Station discovered that a pipe running under a 27-acre toxic waste pond had collapsed. The company reports that up to 82,000 tons of coal ash mixed with 27 million gallons of contaminated water drained out, turning the river gray and cloudy for miles. The accident ranks as the third-largest such coal ash spill in the nation's history.

The public was not told about the breach until the following day, and initial reports provided by Duke and DENR did not make clear the massive scale of the disaster. It took six days for the company to finally seal the pipe.

State regulators initially said testing showed levels of arsenic, lead and other toxic contaminates in the river water were at levels low enough to be safe for both fish and humans. On Sunday, however, the state officials admitted they had made an "honest mistake while interpreting the results" and issued an advisory warning people to avoid prolonged contact with the water.

Duke said Monday it plans to start cleaning out a small section of the river nearest to the spill site.

"We're going to use big vacuum hoses and a vacuum truck to pull that ash out," said Paige Sheehan, a company spokeswoman. "It will help us better inform our long-term plan and test out a particular technique to see if it's effective. It's a long-term process. We won't be able to do this overnight, but we will be here until the job is done."

Duke issued a public apology for the spill last weekend and said it would be accountable for cleaning up its mess.

Environmental groups Waterkeeper Alliance and the Yadkin Riverkeeper on Tuesday offered a $5,000 reward for evidence that leads to civil or criminal charges related to the toxic spill.

Duke spokesman Tom Williams declined to confirm or deny that federal regulators have subpoenaed the utility for information about the coal ash ponds and the spill.

"Duke Energy will cooperate with any state or federal agency that might undertake an investigation of the Dan River ash release,” Williams said in an email to WRAL News.

DENR officials didn't respond to questions as to whether the agency was subpoenaed.

AP reported Sunday that environmental groups have tried three times in the past year to use provisions under the Clean Water Act to sue in federal court to force Duke to clear out leaky coal ash dumps.

The groups sued after North Carolina regulators failed to act on evidence conservationists gathered of groundwater contamination.

Each time, the state agency blocked the citizen lawsuits by intervening at the last minute to assert its own authority under the act to take enforcement action in state court. After negotiating with the company, the state proposed settlements that environmentalists regarded as highly favorable to the company.

Clean water advocates have long complained that state regulators are too cozy with the polluters they regulate. But they say the relationship appears to have grown closer since McCrory's inauguration in January 2013.

Since his unsuccessful first campaign for governor in 2008, campaign finance reports show Duke Energy, its political action committee, executives and their immediate families have donated at least $1.1 million to McCrory's campaign and affiliated groups that spent on TV ads, mailings and events to support him.

After winning in 2012, McCrory appointed Raleigh businessman John Skvarla to head the state environmental agency charged with policing his former employer. Skvarla has described his agency's role as being a "partner" to those it regulates, whom he refers to as "customers."

Lawyers for the environmental groups who had tried to sue Duke in federal court were shut out of the negotiations between state regulators and the company that produced the now scuttled settlement proposal. They had hoped to convince the state judge overseeing the case to reject the deal.

Frank Holleman, a senior attorney at the Southern Environmental Law Center, worried that Monday's about-face might be just another tactic by the state to help Duke avoid paying for the harm it has done to the North Carolina's rivers and lakes.

"They are reacting to the public heat," Holleman said. "The spill at Dan River has shown that the entire path they have taken – not enforcing the law effectively as to coal ash – is a political embarrassment and a disaster for clean water in North Carolina. They are scrambling to figure out what to do without losing face."