Customers win in Duke Energy IGCC cost case
The Indiana Utility Regulatory Commission (IURC) has approved a settlement agreement in regard to Duke Energy Indiana's revised cost estimate for its new integrated gasification combined cycle facility (IGCC) in Edwardsport, Ind.
The decision reduces the amount Duke Energy's Indiana customers will pay for an advanced technology, environmentally cleaner coal power plant and provides clarity to the company for cost recovery on the project.
The settlement sets a hard cost cap for the project at $2.595 billion and requires Duke to absorb nearly $900 million in cost overruns given the plant is now projected to cost approximately $3.5 billion. However, the settlement does permit the allowance for funds used during construction in accordance with state law.
A total of $28 million was allocated for ratepayers due to unwarranted cost control incentive payments and delays caused by project cost overruns. Further, Duke must not file a rate case prior to March 2013 or implement one before April 2014.
In response to the settlement agreement, Duke Energy Indiana President Doug Esamann said that the "decision resolves key regulatory issues and allows us to focus on bringing into service a plant that will help us meet increasingly strict federal environmental regulations while still using an abundant local resource, Indiana coal."
- see the Order
Duke proposes settlement agreement