Kokomo — State regulators heard a dissonant mixture of adulation for Duke Energy’s corporate citizenship and disgust with a proposed 19 percent electricity rate hike at Tuesday’s field hearing in Kokomo, as they continue gathering evidence on the Edwardsport power plant project.
Four of the five members of the Indiana Utility Regulatory Commission were on hand to hear more than three hours of testimony for and against Duke’s latest request to pass along costs from the estimated $2.88 billion project.
At issue is whether Duke will be able to pass along another $530 million of that project’s cost to ratepayers, who are already on the hook — and are currently paying — some $2.35 billion.
Originally capped by the IURC at $1.95 billion, the project has been plagued by cost overruns. Further muddying the waters has been an ongoing ethics scandal involving alleged improper contacts between IURC and Duke officials. The former head of the IURC and three Duke executives have lost their positions in the wake of that scandal.
“It is obvious that one, they knew or should have known from the start how much this was going to cost,” said Doug Smith, an engineer at Rochester Metal Products, a Rochester foundry.
“It was either gross mismanagement or unethical behavior that led to where we are now, so to what extent should the ratepayers have to pick up the tab?”
Smith said his company stands to see its monthly electricity bill rise from $30,000 to “over $100,000” if the full cost of the project is passed along to ratepayers by the IURC.
He said if that happens, “Our ability as a company to remain competitive will be seriously in doubt.”
But the testimony at Tuesday’s hearing, which was an official proceeding of the state’s utility court, was balanced by numerous officials testifying on Duke’s behalf.
Jeb Conrad, executive director of the Greater Kokomo Economic Development Association, and Howard County Commissioner Paul Wyman both praised Duke as a corporate citizen, with Wyman testifying about Duke’s involvement in the annual local Youth Leadership Summit, and Conrad making a comparison between Duke’s community involvement and the lack of community involvement by an Indianapolis utility.
Wyman urged Duke to “help us get to where we need to be and participate in some of the pain these excesses bring,” but the rest of the pro-Duke testimony was fully in favor of the project.
William Konyha, director of the economic development organization in Wabash, praised Duke’s current electricity rates as low, and said that if the IURC passes the full rate increase, “I expect our electricity rates to be competitive with everybody in the United States.”
Attorney Jerome Polk, representing the Citizens Action Coalition and several other organizations lined up against the Edwardsport project, cross examined some of the pro-Duke witnesses, asking them how they would respond if a contractor missed initial cost estimates by 30 percent or more.
Administrative Law Judge David Veleta cut Polk’s questions off about halfway through the evening, when it became clear testimony would take far longer than the 21⁄2 hours it took at the IURC’s other field hearing Monday in Columbus.
Aside from questions about the cost to ratepayers, particularly Hoosier businesses trying to remain competitive, the commissioners also heard from environmentalists Tuesday.
Logansport resident Joe Shidler questioned why the state hasn’t explored ways of encouraging the use of alternative energy, saying he has a solar array that provides all of his home’s electricity.
And Dennis Shock, a retired Carmel clergyman, gave the commissioners a letter, signed by 33 members of the clergy, which called the plant both unnecessary and morally unacceptable.
Beyond the additional carbon dioxide emissions, which Shock said would add to global warming problems, the clergy also questioned the wisdom of a major increase coming at the same time Congress is considering slashing home heating assistance.
Shock said the rate increase request “demanded nothing of Duke shareholders, who stand to profit from the plant without bearing any of the risk.”
And Lindsey Helmbock, an Indianapolis activist, said the commission has a duty to renew the trust of Hoosiers in their government in the wake of the ethics scandal.
“This would require a standard of courage and backbone I have not seen in my lifetime,” Helmbock said.
Duke officials did not testify at the meeting, and have until March 11 to file their official testimony with the IURC.
The state’s Office of the Utility Consumer Counselor, which had representatives at Tuesday’s hearing, is due to file testimony on the rate increase by May 13, and the IURC is expected to make a decision some time in August.
• Scott Smith is a Kokomo Tribune staff writer. He may be reached at 765-454-8569 or via e-mail at firstname.lastname@example.org