Consumer group says Indiana power plant has failed customers

A consumer group is calling on Indiana utility regulators to revoke or modify approval of Duke Energy Corp.’s massive Edwardsport power plant, saying it is costing Indiana ratepayers too much money and has fallen far short of the company’s promises for producing low-cost electricity since going into service in 2013.

Citizen Action Coalition of Indiana, which has repeatedly called the plant a “boondoggle” and a "science project," and unsuccessfully tried to stop the project in court, on Wednesday asked the Indiana Utility Regulatory Commission to give the plant's performance another look.

“Building and operating Edwardsport has been an economic catastrophe for Duke’s ratepayers,” said David A. Schlissel, a consultant for CAC and director of resource planning analysis for the Institute for Energy Economics and Financial Analysis, a think tank in Cleveland. “And Edwardsport will continue to be a catastrophe for ratepayers unless the IURC takes strong and effective actions to protect them.”

The $3.5 billion plant in southwestern Indiana is one of the most expensive projects in state history, and was funded largely by ratepayers.

Currently, the average Duke Energy customer is paying $14.81 per month for the plant in their monthly bill through a tracker. Duke Energy wants to raise that amount to $15.39.

"The Citizens Action Coalition is focusing on the past and not current data that shows that Edwardsport is performing well," Duke said in a written statement. "The plant had strong operations throughout 2017—a 73 percent net capacity factor and a 99 percent availability when you factor in both coal and gas. It has taken time and work to get to this point, but today the plant is serving Indiana customers using advanced technology to produce cleaner power from Indiana coal."

During its 55 months of operations, the plant has had repeated outages and costly repairs, due to logged and corroded pipes, leaky valves and faulty thermocouples. The plant’s huge gasifiers have been taken out service during repairs.

The gasifiers are key systems of the 618-megawatt plant, which converts coal into combustible synthetic gas to drive turbines that produce electricity.

As a result, the plant has operated at an average of 40 percent capacity on synthetic gas, CAC said—far below the company’s original promise of 79 percent. Last year, the plant improved and operated at 60 percent of capacity, still below the promised level.

“This coal-to-synthetic gas part of the plant is a Rube Goldberg machine, funded by unwilling ratepayers forced to pay excessive and unreasonable utility rates,” said Kerwin Olson, CAC’s executive director. “When is enough enough?”

Duke Energy had originally described the plant as a producer of low-cost electricity. But costs soared far above its $1.6 million original construction estimate, due to under-estimations on the amount of pipe, concrete and other materials needed. Several major accidents shut down work areas for days.

Since 2013, ratepayers have paid nearly $1.8 billion for electricity, which is $1.4 billion more than they would have paid on the wholesale market, CAC said.

The group asked the IURC to reconsider the plant’s approval, saying it has not served the public well. As an alternative, CAC is asking regulators to require Duke Energy to file a rate case to determine how much of the investment in Edwardsport is “used and useful,” a legal yardstick in determining utility rates.

A third option, CAC said, is for state regulators to initiate a special proceeding to consider options that would ensure that the cost of electricity from Edwardsport is comparable to other sources.

Duke Energy serves 820,000 customers in 69 of Indiana’s 92 counties.

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