Now that Duke Energy’s Edwardsport 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 that 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’s right, nearly $3 billion yet to be accounted for and ultimately coming from ratepayer pocketbooks.
That 14.5 percent only represents the nearly $665 million in construction work in progress charges, 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 whether you can get a straight answer.
Duke is already collecting about $30 million a 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 about 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 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.
Lastly, it needs to be understood that the IURC has declined to protect consumers from a white elephant by refusing to place any operational or performance requirements on the Edwardsport plant. Despite this plant being a first-of-its-kind technology, never built or operated on this scale anywhere in the world, if it doesn’t work or operates at less than the 85 percent capacity factor that Duke estimated the plant will achieve, Duke ratepayers are stuck with the bill, no questions asked. As long as the plant runs for even a minute, Duke gets the full amount as allowed under the settlement.
With Duke already collecting more than $30 million a month from customers for this plant, which is already two years behind schedule, Duke indicates it will be another 15 months before the plant is expected to have its long-term level of availability – whatever that means. Duke has been less than forthcoming every step of the way with this boondoggle. Why should anyone believe them now?
Citizens Action Coalition