Amid the current ethics scandal and announcement by Indiana Utility Regulatory Commission (IURC) Chairman James Atterholt of a full audit of Duke Energy dockets, which include the unneeded and problem-plagued IGCC power plant under construction in Edwardsport, the time is now for Duke Energy to come clean and disclose what the true impact on consumers will be as a result of adding this boondoggle into their electric rates.
Duke has been misleading the public and the General Assembly about the true costs to consumers since they actively began lobbying for enabling legislation earlier this decade. In a press release dated November 20, 2007, Duke Energy announced the IURC granting approval to build the 630MW IGCC power plant in Edwardsport, IN. At that time, the cost to construct the plant was $1.985 billion. That press release stated: "The plant will result in an average electric rate increase of approximately 16 percent..."
"Duke has been misleading the public and the General Assembly about the true costs to consumers since they actively began lobbying for enabling legislation earlier this decade."
Six short months later in May 2008, Duke Energy announced a $365 million cost increase, bringing the price tag to $2.35. Duke stated in a press release issued May 1, 2008: "The project will result in an average customer rate increase of approximately 18%..." The Commission approved that cost increase in May of 2009 and Duke stood firm with the 18%, until earlier this year.
On Sept. 17, 2010, Duke Energy issued a press release announcing a settlement agreement with the Indiana Consumer Counselor and Duke Industrial Customers that establishes a hard cap on the cost of the IGCC at $2.975 billion, or a $625 million increase over the previously approved amount of $2.35 billion. That same press release claimed: "If approved, the agreement has the effect of lowering the plant's customer rate impact from an overall average 19 percent to 16 percent."
The companies' statements are conflicting and perplexing. How can costs increase over a half a billion dollars, yet result in a 3 percent decrease in rates?
Jim Rogers, CEO and President of Duke, will be before the IURC on November 3 in an attempt to justify the need for the plant. Disclosing what the impact of this plant will be on ratepayers should be a requirement of Mr. Rogers as well, as there is a direct correlation between the need for power and the cost of that power to serve the public.
The Illinois Commerce Commission recently concluded a full review of a similarly sized and priced project, the Taylorsville Energy Center. The report by the ICC was released in September and showed the electricity generated from the Taylorsville IGCC will cost about 21.3 cents per kWh. For a point of reference, the average residential ratepayer in Indiana is currently paying about 9.28 cents per kWh.
Homeowners, small businesses, and municipalities are all struggling to make ends meet and can ill afford to be hit with massive, possibly illegitimate rate increases. This project should not be allowed to continue without understanding its true impacts on Hoosier pocketbooks.
Kerwin Olson is Program Director for the Citizens Action Coalition. He can be reached at email@example.com.