Citizens Group: Duke Falsely Certified Edwardsport Plant "In-Service" To Skirt Construction Cost Cap

In 2012, Duke Energy reached a settlement agreement with the Indiana Utility Regulatory Commission over cost-overrun issues concerning its Edwardsport coal gasification plant. Under the agreement, Duke agreed it would not be allowed to charge utility consumers more than $2.595 billion for the new utility plant. Duke claimed the new utility plant would cost $1.9 billion when granted approval by the IURC to construct it, but those estimates proved to be about $1.6 billion short. The Citizens Action Coalition now accuses the utility company of prematurely placing the power plant in-service in June 2013 in order to skirt the construction cost cap by which it was supposedly bound by the 2012 agreement.

A press release from the consumer group says testimony before the IURC shows Duke billed its ratepayers $400 million before the Edwardsport power plant delivered any net energy to the power grid. By the end of March, ratepayers had paid in excess of $688 million for the power plant. The consumer group wants the IURC to establish performance standards for the plant and set operating cost caps to protect ratepayers from being overcharged by Duke's mismanagement and failure to abide by the 2012 construction cost cap agreement.

"The Company’s declaration that Edwardsport was ‘in-service’ on June 7, 2013 was an obvious attempt to circumvent or evade the construction cost cap," said technical expert David Schlissel of Schlissel Technical Consulting. "The plant was not in service in any meaningful way." Duke had promised regulators the plant would achieve an average capacity factor of 72% during the first 15 months of commercial operation on gasified coal. According to the consumer group, the plant's average actual monthly capacity factor was a mere 21% since being declared in-service. In fact, the plant hasn't reached the 72% level in a single month since it went online according to Schlissel's testimony.According to Schlissel, the plant was still in the "testing phase" as of November 2014 because it had yet to achieve "substantial completion" of construction during the 18 months it had been in service.