The U.S. District Court for the Southern District of Indiana on Friday ordered Duke Energy to permanently shut down three units—a combined capacity of 265 MW—at the company’s Wabash River Station in Indiana within three months.

The order (PDF) follows a jury finding in May 2008 that Cinergy Corp.—which merged with Duke in 2006—violated the New Source Review provisions of the Clean Air Act (CAA) when it performed certain work on its coal-fired boiler units at several of its Indiana and Ohio facilities without first obtaining a permit. The case pitted Cinergy against the states of New York, New Jersey, and Connecticut, and environmental groups from Indiana and Ohio.

The court, which oversaw that jury trial, had presided over a year-long bench trial on the appropriate remedy for the violations. Judge Larry McKinney on Friday ordered Duke to retire Units 2, 3, and 5 of the 677-MW Wabash Station no later than Sept. 30, 2009.

Duke’s Wabash River plant, which is located in Vigo County, Ind., near the city of Terre Haute has five coal-fired boiler generating units. Units 2, 3, and 4—each 90 MW—went online in 1953, 1954, and 1955, respectively. The 103-MW Unit 5 and 342-MW Unit 6 went online in 1968.

Duke said in a press release Friday that it had proposed to the court the retirement of the three units as a remedy to the violations—but only after 2012, when the company’s new integrated gasification combined-cycle plant in nearby Edwardsport is expected to come online.
The court’s order accelerated that timetable by two years.

“We are disappointed with the court’s decision to accelerate the shutdown of Wabash River Units 2, 3 and 5,” said Duke Energy Chief Legal Officer Marc Manly in a statement. “But even though disappointed, I will reiterate our satisfaction that after 10 years of litigation, the company’s position regarding power plant projects was vindicated in the vast majority of instances about which the government originally complained. We will continue to review the Court’s ruling and evaluate our options.”

The court also ruled on Friday that Duke Energy would not have to install additional emissions reduction equipment on Units 4 or 6, but that the company would have to surrender sulfur dioxide allowances for the period between May 22, 2008, and Sept. 20, 2009. Judge McKinney also reduced the government’s proposed fine on its coal-fired Beckjord plant near Cincinnati from $1.32 million to $687,500 and ordered the company to install emission monitoring devices at that plant.

Duke said that the plant retirements would not affect the company’s operations, because it had made changes to its operating plans following the jury’s verdict last summer. “However, we will have to re-evaluate our plans for meeting peak demand the next two summers and work with the Midwest Independent System Operator to ensure we have an adequate plan for the reliable operation of the system,” said James L. Turner, president and chief operating officer of Duke Energy’s Franchised Electric & Gas segment.

Sources: U.S. District Court for the Southern District of Indiana; Duke Energy