Indiana LIHEAP to Receive Settlement Funds from Duke Energy

February 9, 2016—Four consumers groups have dropped objections and joined a settlement with Duke Energy over the company’s 618 megawatt coal gasification plant in Edwardsport, IN. Citizens Action Coalition  (CAC), the Sierra Club, Save the Valley and Valley Watch have, until recently, been actively involved in objecting to Duke Energy raising ratepayers’ monthly rates in order to pay for the cost overruns for the new plant. The groups had filed numerous challenges in court and with the Indiana Utility Regulatory Commission to limit the amount ratepayers would be charged.

 A previous settlement agreement with Duke Energy capped construction costs that could be passed along to ratepayers at $2.595 billion, but did not cap operating and maintenance costs. The consumers groups accused Duke Energy of attempting to increase the amount the company could get from ratepayers by billing customers while the plant was still in its start-up and testing phase in 2013—a time period that ratepayers are not required to cover.

Kerwin Olson, executive director of the CAC, stated that he had dropped objections and agreed to the settlement in order to win more savings for customers. The consumers groups joined with a group of industrial customers and the state’s utility consumer advocates that had already agreed to a plan to mitigate rate increases.

As a result of this settlement, rates for Duke customers will rise by 2.1 percent, Duke will stop burning coal in its New Albany station by the end of 2022 and will provide $500,000 each to LIHEAP and to small-scale solar projects for churches, schools and other community sites. The donation to the state’s LIHEAP fund is to be used solely for Duke Energy customers through the Helping Hand program.  In addition, Duke will absorb the $87.5 million in plant operating costs that were deferred since the plant went into service in 2013.

Sources: media sources, Indiana Utility Regulatory Commission