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Indiana Office of Utility Consumer Counselor

OUCC > Electric > Cases of Note > Duke Energy IGCC Project Duke Energy IGCC Project

Duke Energy's electric generating plant in Edwardsport, Ind. has recently started commercial operations. The company received Indiana Utility Regulatory Commission (IURC) permission to build the plant in 2007 and has since sought cost recovery for capital and various operating costs of the project through rates, as allowed by state law, in proceedings before the IURC.  

On December 27, 2012, the IURC approved a settlement agreement among the OUCC, a group of Duke Energy's large industrial customers, Nucor Steel and Duke Energy. The approved agreement permanently caps the project's costs and shields ratepayers from nearly $900 million in cost overruns. For a summary, please see the OUCC's April 30, 2012 and December 27, 2012 news releases.

The IURC's December 27 order is 134 pages in length. 

In ongoing proceedings, the OUCC continues to closely monitor the Edwardsport project's costs in light of the 2012 order. This includes close scrutiny of Duke Energy's various rate tracking filings to ensure that the utility only receives appropriate cost recovery, and receives it through the appropriate tracker mechanism.

In the pending IGCC recovery cases, the OUCC is recommending $114.8 million in ratepayer relief:

 

 
Background

  • The plant is a 618-megawatt integrated gasification combined cycle (IGCC) facility. Rather than using traditional means of coal-fired generation, the baseload generating facility is designed to use IGCC technology to convert coal into a synthetic gas. Remaining nitrogen oxide (NOx), sulfur dioxide (SO2) and mercury emissions are then removed from the gas before it is burned to generate electricity.

  • Duke Energy declared the project in service as of June 2013. It replaced a 160-MW facility at Edwardsport that had been in operation since the 1940s.

  • When proposed in 2006, the project had an estimated cost of $1.985 billion, which was revised in 2008. The IURC approved the revised estimate of $2.35 billion in January 2009.

  • In November 2009, Duke Energy requested IURC approval for a revised cost estimate of $2.88 billion. The Indiana Office of Utility Consumer Counselor (OUCC) filed testimony regarding the proposed cost revision on July 30, 2010, recommending a cap on project costs and expressing serious concerns about the project's cost increases and continuing inaccurate cost estimates.

  • On September 17, 2010, the OUCC, Duke Energy, and most other consumer parties in this case reached and filed a settlement agreement with the IURC regarding the project's costs. The agreement was withdrawn on December 9, 2010.

  • The IURC held public field hearings on February 28, 2011 in Columbus, Indiana and March 1, 2011 in Kokomo, Indiana.

  • In testimony filed on July 14, 2011, the OUCC recommended that the project be completed, but that the IURC deny rate recovery of any costs over Duke Energy's original estimate ($1.985 billion).

  • A new settlement agreement, filed on April 30, 2012, permanently caps the project's costs and provides a number of additional consumer benefits. The IURC approved this agreement with slight modifications on December 27, 2012.

Ongoing Rate Recovery

Duke Energy recovers its costs for the project through a billing component known as the IGCC rider. As allowed by state law, Duke may request adjustments to the IGCC rider twice each year. The IURC has adjusted this rider to reflect current construction costs on a semi-annual basis.

 
For More Information

All public documents in these cases, including formal testimony, are available on the IURC Website by clicking here and entering docket number 43114. Key documents in the proceedings can be found under 43114 – IGCC-4S1.

This page will be updated as warranted.

12-16-14