— State environmental regulators and representatives of Duke Energy were in early and frequent contact soon after environmental groups threatened in January 2013 to sue the power company over contaminants leaking from its coal ash ponds.

North Carolina would eventually sue the company itself, cutting off the Southern Environmental Law Center's attempt to take the lead in that litigation.

Emails obtained by the organization and released to media organizations Thursday show that officials for the company were in contact with the Department of Environment and Natural Resources soon after the SELC filed its notice to sue and maintained a close working relationship throughout the year.

"DENR is supposed to be a public agency that protects the public interest," said Frank Holleman, a lawyer for the SELC. "What you have here is a very cozy relationship between the law enforcement agency and the law breaker."

He points to email chains that show Duke's demands that the state not require the company to take specific actions to clean up coal ash, but rather just set a timeline for having cleanup plans in place.

A spokesman for DENR said those emails were routine and pointed out that Duke was ready to make a legal case that it had not violated any federal or state laws.

"The Attorney General's Office, who acts as our lawyers, worked on the particular language that's in the consent order, and that was predicated on existing law and precedent," said DENR spokesman Drew Elliot.

Lawsuits preceded the spill

Coal ash is the material left over after coal is burned for fuel. While much of it is inert, it contains toxins like arsenic, mercury and boron.

Duke's coal ash pits have been in the news since a Feb. 2 spill at the company's plant in Eden released some 39,000 tons of toxin-laced slurry into the Dan River. However, a year before that spill, the SELC had given notice that it would sue the company over the slow leaching of toxins from a western North Carolina plant.

Before that suit could take hold, the state stepped in and sued the company itself. Lawyers for the SELC say the state was obstructing their efforts to hold Duke accountable, while the state said it was fulfilling its obligations to uphold federal clean water laws.

The state has now sued Duke over leaching toxins from the company's 14 coal ash plants across the state. The SELC says that the state's proposal to settle legal action over two of the plants with a $99,100 fine but no requirements to take specific actions is a sweetheart deal for the $50 billion company.

MAP: Coal ash ponds in NC

Locations source: NCDENR permits. Informatoin source: Duke Energy

Some emails released by the SELC are seemingly innocuous.

One, for example, that asks "how Duke wants to be sued" is part of an email chain that expressed confusion over the company's proper name. Kathy Cooper, a lawyer working for DENR in the Attorney General's Office, wrote to Debra Watts, supervisor of DENR's Groundwater Protection branch, noting that Duke had just merged with Progress Energy.

"I need to check with Lacy about how Duke wants to be sued. Right now this complaint names Carolina Power and Light Company d/b/a Progress Energy Carolinas, Inc. as the defendant. I noticed in the Secretary of State’s website that Duke is changing the name of Progress Energy as well to Duke Energy Progress. CP&L’s shareholders voted for the name change on 3/8/13 but it is not effective until April 29, 2013," Cooper wrote.

Other emails detail communications between the lawyers for the state and lawyers for Duke. For example, in an April 1, 2013, exchange, Frank Emory, who is working for Duke, asks Cooper if the state would object to a 30-day extension of time to answer a complaint.

Cooper writes back that she doesn't object and then adds, "We heard from Charles Case last week that Duke/Progress are interested in working on a Consent Judgment to resolve this matter. DENR's General Counsel, Lacy Presnell, is taking the lead on arranging a meeting to start the discussion."

Drafting compromises

In other exchanges, lawyers for the state and Duke discussed proposals for permits and drafts of a consent order.

Those exchanges are more problematic, Holleman said, because they show environmental regulators backing off demands that Duke propose specific actions to clean up its coal ash waste.

"We think it makes sense for the Consent Order to set out deadlines by which the two companies will provide plans to the Department for completion of the required activities rather than deadlines by which the activities will be completed," wrote Charles Case, a lawyer working for Duke.

DENR's proposed consent order did, in fact, suggest timelines for having plans in place but did not demand specific cleanup actions.

"This is just part and parcel of DENR not enforcing the law," Holleman said.

A Superior Court judge last week drew a similar conclusion, saying DENR had failed to follow the law and order Duke to clean up its coal ash ponds.

But Elliot said DENR was trying to ensure some action was taken, rather than fighting out a lengthy lawsuit.

"Maybe today you have things turn out differently because we know more," Elliot said. "We had to make decision based on what we knew at the time."