Another Setback for Edwardsport IGCC Cost-Recovery Agreement

On Thursday,  Duke Energy Indiana, the Indiana Utility Consumer Counselor, the Duke Energy Indiana Industrial Group, and Nucor Steel jointly notified the Indiana Utility Regulatory Commission (IURC) that they are withdrawing their Sept. 17 settlement on cost increases associated with Duke Energy’s Edwardsport coal gasification power plant near Vincennes, Ind. The parties agreed to enter into new settlement negotiations. 

"This action is the best path forward for the Edwardsport project at this time," said James E. Rogers, Duke Energy chairman, president and chief executive officer. "While we are disappointed the original settlement is being withdrawn, we understand the parties’ desire to negotiate a new settlement that is separate and apart from recent events.

"The support and cooperation of the settling parties is important to us, so we have agreed to re-examine and renegotiate the terms of the cost settlement. The merits of the Edwardsport plant are strong and construction continues to move forward. The total project is about 80 percent complete and we are on track to finish the plant by the fall of 2012."

"The OUCC [Office of Utility Consumer Counselor] continues to support the Edwardsport project for the reasons our agency has stated on numerous occasions," said Indiana Utility Consumer Counselor David Stippler. "However, due to recent revelations about communications between Duke Energy and the former IURC chairman, our office has called into question the integrity of the process that led to the settlement agreement. For these reasons, it is appropriate to reopen the negotiation process and take a fresh look at the issues addressed in this case.

The Indianapolis Star recently published emails showing a cozy relationship between Duke executives and top state utility commission lawyer, Scott Storms, who later took a job with the utility. At issue is whether the IURC had customers’ best interests at heart while considering decisions related to the plant. The IURC has cleared Storms in nearly all Duke cases.

Three executives have been fired or resigned: James Turner, the second-highest-paid executive at Duke; Mike Reed, president of Duke Energy Indiana; and David Lott Hardy, chairman of the IURC.

The IURC had given Duke approval to pass $2.35 billion of the integrated gasification combined-cycle plant’s construction costs on to customers. But the price tag keeps rising, and cost overruns currently stand at $500 million dollars. Whether any or all of that amount (or a final, higher amount) will be passed on to consumers remains an open question.

The groups have proposed a new schedule for the IURC’s consideration of the revised cost with hearings that—if approved—may begin as early as mid-March.

Sources: PR Newswire,, Indianapolis Star, Louisville Courier Journal, POWERnews

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