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RALEIGH, N.C. (AP) -- Duke Energy says it plans to begin dredging coal ash out of a North Carolina river as state officials move to scuttle a previously proposed settlement with the company over pollution leaking from waste dumps at its power plants.

Lawyers for the state Department of Environment and Natural Resources asked a judge late Monday to disregard its own proposed settlement with the nation's largest electricity provider. Under the deal proposed over the summer, Duke would have paid fines of $99,111 for pollution that leaked from two coal dumps like the one that ruptured Feb. 2, spewing out enough toxic sludge into the Dan River to fill 73 Olympic-sized pools.

The state dumped the settlement one day after a story by The Associated Press in which environmentalists criticized the arrangement with Duke as a sweetheart deal.

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