Indiana Utility Regulatory Commission and Regulation and Duke Energy and Electric and Energy & Environment and Utilities and Utility rates

Indiana watchdogs seek probe of Duke Energy plant

February 1, 2011

Consumer advocates are calling for Indiana regulators to appoint an independent investigator to look into whether Duke Energy Corp. used undue influence to win state approval for a nearly $3 billion coal-gasification plant the company is building in southwestern Indiana.

Consumer advocates say Indiana's regulatory process involving the plant has been so tainted with inappropriate and secret conversations between Duke employees and state officials that the public has lost confidence.

The Office of Utility Consumer Counselor compared it to jury tampering and said the matter remains suspect, even though several Duke and state officials have been fired or resigned, The Indianapolis Star reported Tuesday.

IBJ reported in September that consumer groups were unhappy about the plant and were calling for its cancellation.

"If you tamper with one juror, you don't have to tamper with all 12" to obstruct justice, Randall C. Helmer, the deputy consumer counselor, said Monday during a hearing before the Indiana Utility Regulatory Commission.

The IURC, which is working to determine how to proceed with the case, did not make an immediate decision on the matter.

Duke took issue with the "jury tampering" comments, saying that every past decision related to the Edwardsport plant has been unanimous by the IURC.

"If a commissioner wants to dissent, they can," said Duke spokeswoman Angeline Protogere. "Also, most of the current commissioners were not even part of the IURC when the plant was originally approved."

Helmer said he would favor a special prosecutor or other independent agent to examine whether Duke overstepped legal boundaries when several executives contacted state regulators to discuss the $2.9 billion plant that Duke is building in Edwardsport, as well as company hiring decisions and vacation plans.

Timothy Stewart, an attorney with Lewis & Kappes, which represents large industrial customers of Duke Energy — including manufacturers and shopping centers — said that appointing an independent investigator is "the only way the public will ever have confidence in the outcome of this matter."

Indiana is coming under increasing pressure from consumer groups and industrial customers to make more information available and allow the public a greater say in the matter.

The IURC has been stung in recent months by findings that one of its own high-level officials, general counsel Scott Storms, had presided over hearings about the Edwardsport plant while talking to Duke about a job. Storms quit the IURC in September to take a job with the utility.

A week later, Gov. Mitch Daniels fired the IURC chairman, David Lott Hardy, saying he knew of Storms' conflict of interest but did nothing to stop it.

Storms has since been fired from Duke and accused of ethics violations by the Indiana inspector general on charges of having an improper financial interest arising from employment or prospective employment at Duke.

The IURC has delivered other documents to The Indianapolis Star that were requested under open-records laws, including hundreds of compromising e-mails between state regulators and Duke executives.

The Star also requested a wide array of documents in December from the governor's office under the open-records laws. The governor's office has yet to deliver those records, even though officials there originally said the records would be provided "as they are gathered."

Jane Jankowski, the governor's press secretary, said Monday that records were still being compiled and declined to provide a timetable of when they might be available.

"I don't know when," she said. "There's a lot of stuff going on around here. I don't know exactly when this will be provided to you. It will be provided when they're done going through all the documents."

Jerry Polk, an attorney for four consumer and environmental groups, said he favored the IURC appointing an "independent agent" to look into questions of undue influence.

"There doesn't have to be a quid pro quo or a payoff to taint the whole process," he said later. "Sometimes it's just a matter of inappropriate contact."

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