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Utility Commission Approves Duke Energy Settlement

Duke Energy is being required to absorb nearly $900 million dollars in overrun costs for the construction of its Edwardsport coal gasification plant after a settlement was approved Thursday.

The agreement between Duke and consumer groups, which the Indiana Utility Regulatory Commission approved, allows the company to pass on to its customers the construction costs of nearly $2.6 billion—the amount the Edwardsport plant was estimated to cost as of June.

Six months later, the plant is now expected to cost $3.5 billion and the agreement requires the energy company to absorb that difference.

Anthony Swinger is a spokesman for the Indiana Office of Utility Consumer Counselor. He says his organization is pleased with the commission’s decision to approve the settlement.

“We believe that this agreement is going to be a benefit to all consumers, that this will protect Duke rate payers from cost overruns, $900 million in cost overruns and that includes both construction costs and financing costs," Swinger says.

Reading from a statement, Duke Energy spokesman Lew Middleton says the settlement states it is in the public interest for the project to be completed.

“The settlement agreement that the commission did approve with some of the state key consumer groups reduces the amounts that Duke Energy customers will pay for this advanced technology and environmentally cleaner coal plant," he says.

Middleton says Duke officials are conducting an internal review into the final agreement because of some changes the commission made to the original settlement—including an order that requires Duke to return any project costs recovered through future litigation claims to its ratepayers.

The Edwardsport plant is scheduled to be fully operational by mid 2013.

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