Duke Energy has agreed to a $2.5 million settlement with Virginia over a massive coal ash spill that coated 70 miles of the Dan River in gray sludge in February 2014, state environmental officials announced Friday.

The Virginia Department of Environmental Quality (DEQ) said that, as part of the settlement, Duke would fund environmental projects in communities affected by the spill. The "restoration opportunities" are still being developed, but the DEQ noted that Duke had already removed sludge and soil from the river near Danville.

The remaining $250,000 would be placed in a fund for the department to respond to environmental emergencies.

“This order is a significant step forward in Virginia’s efforts to protect our communities and natural resources following the coal ash spill,” said DEQ Director David K. Paylor. “It also ensures that Duke is held fully accountable for the impact of this incident.”

Duke Energy North Carolina President Paul Newton expressed commitment to the deal.

“Although the Dan River coal ash spill occurred in North Carolina, we recognize the number of miles that the river spans in Virginia. Duke Energy is committed to working with Virginia DEQ to expedite the benefits of this agreement and to help protect and restore natural resources in the state,” Newton said in a statement, according to the Charlotte Observer.

The spill originated in North Carolina but affected areas in Virginia, too, including 2,500 tons of toxic ash that backed up in a dam in Danville.

The settlement is still subject to approval by the State Water Control Board. And the consent order does not preclude affected Virginia localities from seeking their own settlements with Duke.

"This is strictly between the state of Virginia and Duke," said DEQ spokesman Bill Hayden.

Danville officials did not immediately respond to a request for comment from The Associated Press.

In February, Duke and federal prosecutors said the energy giant had agreed to plead guilty to violations of the Clean Water Act and pay $102 million in fines, restitution and community service. The company said the costs of the settlement will be borne by its shareholders, not passed on to its electricity customers.

Duke adamantly denied any wrongdoing regarding its coal ash dumps for years. But in December, the company conceded in regulatory filings that it had identified about 200 leaks and seeps at its 32 coal ash dumps statewide in North Carolina that together ooze out more than 3 million gallons of contaminated wastewater each day.

Al Jazeera and The Associated Press