— When Duke Energy says it wants to cover coal ash cleanup costs by raising customer rates, it means right down to the bottled water it's bought people living near the ash pits, a top executive testified Tuesday during a hearing on the company's proposed rate increase.

That tab, less than $300,000 so far, is a small part of the $184 million a year Duke Energy Progress wants ratepayers to pony up for coal ash disposal at plants in North Carolina. But it speaks to the level of detail on display as Duke executives try to convince the North Carolina Utilities Commission to sign off on an increase, a process that proceeds much like a courtroom trial.

Lawyers with the state Attorney General's Office peppered Duke's state president with questions Tuesday morning, moving from the bottled water issue to a long-running feud that Duke and its predecessor companies have with a string of insurers that refused to cover coal ash cleanup costs. Those fights go back to the 1990s, suggesting a question: If executives knew then that the company faced significant costs from coal ash, why didn't they address the issue then?

Special Deputy Attorney General Jennifer Harrod also pointed Tuesday to a 1985 notice from the U.S. Environmental Protection Agency, which reviewed coal ash deposits at a Wilmington plant then owned by Carolina Power & Light, now known as Duke Energy Progress. Under "description of potential hazard" the document states, "Groundwater contamination most likely although potential for surface water and soil contamination should be thoroughly addressed also."

Duke state President David Fountain repeatedly told Harrod that he couldn't pin down "a specific time" the company became aware of the potential environmental dangers its unlined coal ash pits posed. He said many of the documents presented Tuesday predated him at the company. At one point, Harrod asked whether Fountain knew anyone else who could speak to a document from 1996.

"Not off hand," Fountain said after a long pause.

"Appreciate the effort," Harrod replied.

State law allows Duke to charge customers for costs the Utilities Commission deems "reasonable and prudent." Attorneys for a number of entities, including the Attorney General's Office, question the company's prudence on coal ash, an issue that prompted new state disposal regulations after tons of toxin-laden ash spilled into the Dan River in early 2014.

"If they knew they were polluting groundwater back in 1985 ... they should have done something," said John Runkle, the attorney for an advocacy group in these hearings called NC WARN. "It's not reasonable and prudent to wait until someone makes you do it."

Both Duke Energy Progress and its sister company, Duke Energy Carolinas, argue that customers who benefited from cheap coal-fired electricity for decades should also bear the costs of cleaning up ash ponds around the state. It's a large part of the extra $1 billion a year the two companies have asked the commission to approve in separate rate cases.

The two companies also sued some 30 insurance companies earlier this year over their refusal to pay coal ash costs out of policies dating back as far as the 1970s, and company officials have said customers would be reimbursed for coal ash costs if these insurers eventually pay up. One of those insurance companies also sued the two power companies, and their parent Duke Energy, in federal court, arguing that they missed the statute of limitations to file suit by years. That federal suit has been withdrawn, but Harrod keyed in on the issue Tuesday, asking Fountain why his company waited so long to file a lawsuit against its insurers.

She said rate payers could lose big because Duke "blew the statute of limitations," and she questioned whether that suit is even moving forward. Repeated requests from the Attorney General's Office to see documents released via discovery in that case turned up nothing, she said.

"The answers to those questions, about what Duke knew and whether it was adequately handling its coal ash ... could bear on whether Duke's operating expenses are reasonable, right?" Harrod asked.

"It could bear on a number of those topics," Fountain replied.

Harrod also asked whether Duke might settle its claims with insurers without admitting liability, leaving the statute of limitations question publicly unanswered.

"There are a number of possible outcomes," Fountain replied.

Hearings in Duke Energy Progress' case started Monday and likely will continue into next week. Hearings for Duke Energy Carolinas, which serves the western half of the state, are scheduled for next year. The commission will ultimately decide how much electricity rates can increase and what profits the two regulated monopolies will be allowed to make.