Indiana Utility Regulatory Commission and Regulation and State Government and Duke Energy and Electric and Gas and State Agencies and Energy & Environment and Utilities and Government & Economic Development and Government

State green-lights deeper look into fuel costs at Duke plant

April 9, 2014

The Indiana Utility Regulatory Commission will press forward with a deeper look into fuel costs that Duke Energy Indiana has reported for its new Edwardsport plant.

A separate state agency for utility consumers says the $3.5 billion plant, which began commercial production in June, consumed more energy than it produced during some periods in September, October and November.

The agency, the Office of the Utility Consumer Counselor, estimates that the negative generation cost Duke $1.5 million during those three months. It wants to block Duke's ability to reclaim those costs from its customers.

The office asked the IURC in March to grant more time for scrutiny of Duke's request to recover fuel costs. The IURC, which would approve cost recovery, has agreed to look into the matter further.

Duke has disagreed with the OUCC's assessment and its methodology for calculating the costs. A representative told the IURC during a recent hearing that the fuel costs were neither excessive nor unreasonable, according to a commission filing.

Edwardsport also shut down for 15 days during the three-month period for routine maintenance, Duke noted.

"The station is performing within the original start-up plan, and that activity during this testing, tuning, and optimization time period is important as it produces long-term benefits and efficiencies for the customer,” Duke told the IURC.

In minutes from the hearing, IURC officials generally agreed with Duke but concluded "the public interest is served by a detailed review of the underlying causes of the Edwardsport [negative generation]."

The three-month period in question came before Edwardsport’s production plummeted in January due to technical problems. The slump continued into February, because Duke moved up routine maintenance for the plant, the company said. Duke has said that production rebounded in March.

"When the plant went commercial in June, we estimated Edwardsport would build up to its long-term level of availability (the amount of time it is available to operate) over 15 months," spokeswoman Angeline Protogere said in an email. "It’s a large, complex project, and it has taken time to work out technical issues."

Duke Energy Indiana provides electricity to about 790,000 homes and businesses in Indiana. Parent firm Duke Energy Corp., based in Charlotte, N.C., operates dozens of power plants and serves 7.2 million electric retail customers in six states in the Southeast and Midwest.

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