Now that Duke Energy’s Edwards-port coal gasification plant is allegedly “commercial” as of June 7, it’s once again time to set the record straight and fill in the blanks. For more than seven years now, Duke and the Indiana Utility Regulatory Commission have conveniently left out information they prefer the public not be told, as perhaps the truth is too inconvenient.
Duke, along with the IURC, continues to perpetuate the myth that the plant will result in just a 14.5 percent rate increase. The reality is this 14.5 percent represents only a portion of the financing costs for the project. Additional financing costs of at least $320 million, as well as the actual construction costs currently capped at $2.595 billion, are not included.
That 14.5 percent only represents the approximately $665 million in construction-work-in-progress charges, or CWIP, a tracker or extra fee tacked onto the bill of captive Duke ratepayers. How much more will monthly bills increase after the other $3 billion is factored into rates? Ask Duke or the IURC … see if you can get a straight answer.
Duke is already collecting approximately $30 million per month from ratepayers just for financing costs. In fact, Duke ratepayers will pay more just for the financing charges for the Edwardsport fiasco than Indianapolis Power & Light is seeking in total for its proposed natural gas plant in Morgan County, a plant that will produce approximately the same amount of power.
Duke claims its construction costs are capped at $2.595 billion, but that isn’t accurate. Duke declared the plant “in-service” on June 7, which effectively marks the end of this so-called “cost cap” from the settlement. From this date forward, ratepayers can potentially be stuck with every dollar Duke spends on the plant, and there remains a lengthy “punch-list” of items that are yet to be completed. So, the settlement effectively exposes consumers to the potential of significant costs outside of the cap, which was intended to protect them.