Alpha Pays $209 Million in Upper Big Branch Settlement

Alpha Natural Resources, the global coal company that purchased Massey Energy in January 2011, reached a settlement with victim’s families and the Mine Safety and Health Administration for $209 million in civil and criminal penalties for a mine explosion that killed 29 workers last year.

The explosion at the Upper Big Branch Mine, one of the worst underground mining disasters in 40 years, occurred while still under the ownership and operation of Massey. The settlement includes $46.5 million for families of the victims and those injured in the explosion.

The settlement also includes $80 million to improve safety and infrastructure in all underground mines owned by Alpha; $48 million to establish a mine health and safety foundation; and approximately $35 million in fines from prior violations to the Mine Safety and Health Administration, including $11 million for violations at the Upper Big Branch Mine.

Federal prosecutors are pursuing cases against a number of Massey executives they say are partially responsible for the explosion. But with weak mining laws, prosecutors may face a grueling battle to criminally convict top-level executives such as former Massey CEO Don Blankenship.

Under the Federal Mine Health and Safety Act, safety violations are categorized as misdemeanors, presenting a challenge to prosecutors building the criminal case. Hughie Stover, the mine’s security chief at the time of the blast, was the only individual criminally prosecuted after being found guilty of lying to investigators and disposing of thousands of security-related documents.

Proposed changes to the Mine Health and Safety Act were not passed by Congress last session, but many argue that the explosion brought more awareness to federal inspectors from the Mine Safety and Health Administration which could result in new rules and increased fines.

Alpha Natural Resources says that the company is focused on improving safety in former Massey mines.

Duke, Progress Energies Appeal FERC

In mid-December of last year, the Federal Energy Regulatory Commission made a second rejection of the proposed merger between energy giant Duke Energy and Progress Energy, citing concerns that the merger of the two utilities may create an energy monopoly.

Charlotte, N.C.-based Duke Energy and Raleigh, N.C.-based Progress Energy combined could potentially dominate power markets and manipulate wholesale prices. The results would also eliminate more than 1,860 jobs in North Carolina alone.

The companies claim that the merger would result in hundreds of millions of dollars in savings for customers and would hold down rising electricity costs.

Announced over a year ago, Duke and Progress were planned on finalizing the $26 billion deal by the end of 2011 but have been forced to set back their merger completion date to no earlier than May or June of 2012. The new date for the completion of the merger will allow both companies to revise the deal to accommodate recommendations of the commission.

Once FERC approves revisions to the merger, the N.C. Utilities Commission will approve the measures if they prove beneficial to the state.

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