IBJNews

Consumer groups call for Duke to cancel Edwardsport project

Back to TopCommentsE-mailPrintBookmark and Share

Consumer groups are blasting a proposed settlement between industrial customers and Duke Energy that would cap for now the escalating costs of the utility’s Edwardsport coal gasification generating plant.

They’ve also called into question the Indiana Utility Regulatory Commission’s oversight of the Edwardsport proceedings, noting the agency’s chief legal counsel has accepted a job with Duke. Scott Storms worked on the Edwardsport case as recently as July 23, said Citizens Action Coalition.

electricity factsCAC contends that the proposed settlement gives Duke the opportunity later to roll in cost increases associated with potential government regulation or other events. It also argues that the plant’s cost overruns justify its cancellation.

“They’re completely ignoring carbon risk here,” Kerwin Olson, program director of CAC, said, referring to potential federal regulation to limit carbon dioxide emissions.

The 618-megawatt plant now under construction will be among the largest of a new generation of coal plants that convert coal to gas, clean the gas of pollutants, then burn it.

The IURC is weighing Duke’s latest estimate of plant construction costs, estimated to be $2.9 billion. That’s $530 million more than an upward revision last year and way above the $1.9 billion original estimate.

CAC said it was not included in settlement discussions among Duke, industrial ratepayers and the Indiana Office of Utility Consumer Counselor.

The settlement, if approved by the commission, would cap Edwardsport costs at $3 billion, more than the latest estimate.

Among other provisions is a revised depreciation rate that would save customers $35 million a year.

But CAC says the proposed changes to depreciation and capital are “short-lived” because they could go away in Duke’s next rate case in 2012, “which is when Duke would have filed a rate case, anyway.”

Duke said the settlement, if approved, would lower the rate impact of Edwardsport to a 16-percent average increase, down from 19 percent in the first full year after the plant is to go online in 2012.

Duke plans a pretax charge to earnings in the third quarter of up to $45 million to reflect the settlement.

CAC argues it would be less costly for ratepayers to cancel the project, which is about 70 percent complete.

It points to testimony given earlier this year by a Duke vice president that showed, under one scenario, that cancellation would be the lowest-cost option. But the Duke official said the cost difference between various options wasn’t substantially different.

Gov. Mitch Daniels has supported gasification as a way to continue to use the state’s abundant coal resources.

The CAC on Sept. 21 cited the recently announced departure of Storms to Duke as an example of a cozy relationship between the IURC and the utility.

“At a minimum, it is difficult to maintain the appearance of impartiality when the person overseeing the regulatory process is either shopping for work or being courted by the utility he regulates,” said CAC’s executive director, Grant Smith.

The group alleged Storms may be in violation of the state ethics code regarding post-state employment. CAC cited an example the commission states on its website: “You work for the Utility Regulatory Commission making regulatory decisions concerning a public utility company. You may not work for this utility company for a year,” it states.

But on Sept. 20, the State Ethics Commission issued an advisory opinion saying Storms “neither negotiated nor administered a contract” with Duke. The commission also said Storms never made a regulatory or licensing decision on behalf of the IURC involving Duke. Thus, the commission opined that Storms is not subject to the one-year “cooling-off period” of employment with Duke.

“That’s ridiculous,” responded CAC’s Smith.

While not a commissioner, Storms often ruled on matters such as whether to admit evidence in various utility cases involving Duke, Smith noted. “I just think it tarnishes the whole process.”

IURC spokeswoman Danielle McGrath said the finding on Storms was consistent with previous ethics commission findings.

“The IURC is in accord that only commissioners, the sole decision-makers, are covered by stricter requirements than its employees,” McGrath said.

But the ethics commission did note that Storms would be prohibited from representing or assisting Duke in five specific cases, including one involving the ongoing Edwardsport reviews.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT