By Marti Maguire
RALEIGH, N.C., March 26 (Reuters) - Duke Energy Corp said on Wednesday it will move coal ash from three plants and speed up the closure of an additional basin as the company comes under increased scrutiny after a massive spill in North Carolina contaminated a river used for drinking water.
In a letter to the state's utilities commission and legislators, Chief Executive Officer Lynn Good said Duke, the country's largest electric-power provider, will move wet coal ash to lined landfills from retired plants on the Dan and Catawba rivers.
Ash will also be moved from an active plant in Asheville, and remaining units there will either be closed down or converted to dry-ash storage.
Coal ash, a byproduct of coal-based energy production, contains heavy metals that can contaminate drinking water and harm fish.
Oversight of Duke's storage sites has intensified since a spill on Feb. 2 released 39,000 tons of coal ash sludge into the Dan River, a source of drinking water for several Virginia communities.
Last week, a federal grand jury convened in Raleigh as part of a probe into the company's handling of coal ash.
Federal prosecutors are also investigating the state environmental regulator, the Department of the Environment and Natural Resources (DENR), for its handling of Duke's coal-ash ponds in the state, which it admits are contaminating groundwater.
Earlier this month a judge ordered Duke to immediately clean up the coal-ash ponds as part of a separate state lawsuit filed by environmental groups last year. A settlement proposed by DENR and decried by environmentalists as too lenient was dropped by the state last week.
Governor Pat McCrory, a former Duke executive, has implored the company to do more to clean up the ponds.
Good said in the letter that the moves are part of a "disciplined, fact-based approach to evaluating long-term solutions" to coal-ash storage.
She said all of Duke's coal-ash sites are being reviewed both by an internal task force and outside experts who will report back by the end of May.
The company will have plans in place to secure ash basins at the rest of its seven retired plants by the end of the year, Good said.
"It is good to see the utility becoming publicly responsive to the situation," DENR spokesman Jamie Kritzer said in a written statement responding to Wednesday's announcement.
Attorney Frank Holleman of the Southern Environmental Law Center was more skeptical.
"Duke has yet to make it clear what it is going to do for the other 11 communities (in North Carolina) that are still faced with the possibility of a catastrophe," he said. (Editing by Kevin Gray and Prudence Crowther)