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Citizens Action Coalition, Sierra Club, Save the Valley and Valley Watch join settlement
PLAINFIELD, Ind. -- Additional consumer groups have joined a previously announced settlement with Duke Energy Indiana related to operating costs at the company's Edwardsport coal gasification power plant.
The settlement also now includes additional savings for customers, low-income energy assistance, and solar grants for communities.
"One of the key parts of the new agreement is help for our customers most in need," said Duke Energy Indiana President Melody Birmingham-Byrd. "In addition to limiting what all customers will pay for plant operations, the revised settlement dedicates funds to help low-income customers with their energy bills. It also commits grant funds for community organizations and low-income customers interested in solar power."
Duke Energy agreed not to bill customers $87.5 million of plant operating costs deferred since Edwardsport's in-service date -- $2.5 million higher than the $85 million agreed to in the original settlement.
Additionally, the settling parties are adding $500,000 for low-income energy assistance to the $5 million designated for attorney fees, litigation expenses and other funding commitments in the September 2015 settlement. Plus, another $500,000 is being reallocated for community solar grants. Attorneys' fees and expenses for the new settling parties will be addressed in a separate proceeding.
As a result of the new settlement terms, Duke Energy will take a $3 million pre-tax charge for the fourth quarter of 2015. The company previously took a $90 million pretax charge to earnings in the third quarter of 2015 related to the original settlement. These charges will be reflected as a "special item" and, therefore, excluded from the company's adjusted diluted earnings per share.
In addition, the revised settlement includes a commitment to either retire or stop burning coal by Dec. 31, 2022, at the company's Gallagher Generating Station in New Albany. Duke Energy had expected to retire the plant as early as 2019 because of new environmental rules, but this agreement now sets a firm date for how long the plant can operate, regardless of environmental regulation delays or changes. The plant may retire sooner, however, due to environmental restrictions.
Other key terms from the original settlement such as the plant's in-service date and 2016-17 operating cost caps remain the same.
Duke Energy Indiana and the consumer groups filed the new settlement with state regulators today. The agreement is subject to Indiana Utility Regulatory Commission approval. If approved, the agreement will resolve all Edwardsport-related proceedings pending at the commission.
Background on the Edwardsport Project
The 618-megawatt Edwardsport plant uses state-of-the-art technology to gasify coal, strip out pollutants, and then burn that cleaner gas to produce electricity.
This advanced, integrated gasification combined cycle technology significantly improves plant efficiency. The plant began commercial operation in June 2013.
Edwardsport is a critical part of Duke Energy Indiana's efforts to modernize its generation fleet and an initial step toward replacing older, coal-fired generation expected to be retired due to pending EPA regulations. The Edwardsport plant is the first major new coal-fired power plant built in Indiana in more than two decades.
Duke Energy Indiana's operations provide about 7,500 megawatts of owned electric capacity to approximately 810,000 customers in a 23,000-square-mile service area, making it the state's largest electric supplier.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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