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Opponents of Duke Energy’s Edwardsport Plant Lose Battle As Duke Increases Monthly Charges

Opponents of Duke Energy’s Edwardsport coal gasification plant have lost another battle in the fight to keep Duke from passing on plant development costs to consumers.

Last week, the Indiana Court of Appeal unanimously upheld an Indiana Utility Regulatory Commission ruling in 2012 to allow Duke to increase by 16  percent its monthly charges to its 790,000 Indiana customers to cover increases in costs of its Edwardsport plant.

The appeal to the courts to overturn the IURC deal with Duke was launched by several environmental and consumer groups.

The 618-megawatt plant near Edwardsport had an original 2007 cost estimate of $1.9 billion, but that eventually ballooned to about $3.5 billion. In a 2012 settlement between Duke and the IURC, the commission limited Duke to passing on $2.6 billion of construction costs to its customers. This settlement included the 16 percent rate increase that was the subject of the court appeal.

Duke had been applying this increase to it customers bills since then and, with the court ruling, will continue to do so.

Kerwin Olson of the Citizens Action Coalition say they appealed and are waiting on the ruling.

“We have every intention of taking this as far as we can,” Olson says.

Olson estimates that Duke’s Indiana customers are paying about 15 dollars monthly for the plant which went online last summer.

Since then, it has operated between 10 and 60 percent of capacity.

Duke Agrees To Close Old Terre Haute Coal Power Plants

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A private coalition of environmental groups has forced Duke Energy Indiana to agree to close its old coal-fired power plants in Terre Haute.

The settlement between Duke and the coalition, composed of the Sierra Club, Citizens Action Coalition, Valley Watch, and Save the Valley, was reached before an Indiana Department of Environment administrative law judge. The settlement requires Duke to cease burning coal at most of its Wabash River coal-fired power plant in Vigo County and to invest in new renewable energy projects.

In return, the environmental coalition will drop its appeal of the air pollution permit issued by IDEM to Duke for its Edwardsport coal-gasification and combined-cycle power plant to the south.

We spoke to Jodi Perras, of the Indiana branch of the Sierra Club, about this settlement, as well as another parallel suit concerning Duke.

She said that Duke agreed to retire their coal-fired units and that there was a commitment from Duke to invest in some clean-energy projects.

The result is that a total of 668 megawatts of coal-fired power will come offline.

Currently, Indiana gets more than 90 percent of its electricity from burning coal.

Besides emitting more green-house gases than other fossil fuels, coal-fired power plants are also the country’s biggest source of mercury, sulfur dioxide pollution, carbon pollution, and many other pollutants that can trigger heart attacks and contribute to respiratory problems.

Duke also agreed to pursue either a new feed-in tariff program to purchase at least 30 megawatts of solar power from its Hoosier customers or to purchase or install at least 15 megawatts of wind or solar generating capacity from new facilities built in Indiana.

A feed-in tariff enables customers to earn money from their own solar panels by selling excess power back to electric utilities.

“Duke said previously that they thought they would retire the units at Wabash river because of the mercury and the toxin rule that’s supposed to go into effect in 2015. Those are old plans from the 50’s or 60’s but the mercury rule is being challenged in federal court. If we were to lose that case, Duke still has to retire those units by 2018,” says Perras.

Four coal burning units are required to close by 2015 and the sixth by 2018. While they have settled this suit, the coalition is still continuing with its parallel suit against Duke before the Indiana Court of Appeals to overturn Indiana Utility Regulatory Commission decisions regarding the Edwardsport plant.

In December of 2012, the IURC approved additional rate increases tied to the Edwardsport coal gasification plant which would allow Duke to pass on rising construction costs to power consumers.

The plant is currently $1.6 billion over budget and still not operating at full capacity after eight years of design, construction, and testing.

“We have briefs that are due on Monday so we have been working on that and there’s an opportunity for the folks involved to do a reply brief. The court of appeals will probably schedule those and it’ll take several months before the court issues a decision,” Perras says.

There are several issue in question in this suit: whether the IURC violated the law by failing to consider the long-term costs to Duke Energy ratepayers of controlling the plant’s carbon pollution.

This issue was raised in testimony by citizens groups and ignored in the IURC’s decision, in violation of Indiana law; whether the IURC should have appointed a Special Administrative Law Judge to conduct a formal investigation into reports of behind-closed-doors communications, undue influence, conflicts of interest, and other misconduct involving high-level officials of Duke Energy and the IURC and whether the IURC failed to act as an impartial judge by directing Duke Energy to hire an outside consultant to monitor problems at Edwardsport and report to the IURC on its progress, and then refusing to place the reports into the public record.

This scandal involving conflict of interest between state regulators and Duke has resulted in several firings and transfers but no reversal of the resulting tainted regulatory rulings.

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