August 7, 2018 Read More →

Indiana watchdog seeks to limit charges for coal gasification plant

Energy News Network:

Duke Energy’s coal gasification plant in Edwardsport, Indiana has overcharged ratepayers by $1.4 billion since opening in 2013, according to expert testimony filed last week by a consumer group asking state regulators to demand a new accounting of how much ratepayers should be charged for the plant.

The Citizens Action Coalition filed testimony before the Indiana Utility Regulatory Commission July 31 regarding how Duke recoups costs for the plant from its customers, for both capital expenditures and operations and maintenance.

Before it opened five years ago, the Edwardsport plant was billed as an innovation, turning coal into syngas that is burned in an integrated combined cycle process (IGCC) along with natural gas.

Duke calls it “one of the cleanest and most efficient coal-fired power plants in the world,” noting it burns Midwestern coal and creates local jobs.

But the recent testimony, like evidence filed in the past, alleges that the plant has been a boondoggle with costs skyrocketing due to malfunctions and inefficiency.

“It’s an economic catastrophe for ratepayers,” said David Schlissel, a consultant affiliated with the Institute for Energy Economics and Financial Analysis, who wrote the testimony submitted by the citizens coalition.

Schlissel’s analysis showed that Duke could have provided much cheaper energy from wind, solar or natural gas, based on the prices for energy in the MISO regional transmission organization’s markets and the cost for generation at Duke’s own natural gas plants.

Schlissel noted that the plant has never been through a rate case, the proceedings before regulatory commissions that determine how much customers can be charged for energy from a given plant. Instead, since it went online five years ago the plant has technically still been considered under construction, with rates for its energy set through a less rigorous process.

“It’s not clean coal – it’s Indiana coal, that’s the politics underlying Edwardsport,” said Schlissel. “Originally it was going to be Indiana coal, IGCC technology and going to capture CO2. It quickly became obvious that they weren’t going to capture CO2, but the politics were: let’s burn Indiana coal.”

After the failure to capture carbon dioxide and numerous cost over-runs, Schlissel said, “why the commission would believe anything Duke says about this plant is a mystery to me.”

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