Continuing to Underperform while Customers Continue to Overpay

Duke Energy’s Edwardsport Integrated Gasification Combined Cycle coal-fired power plant (Edwardsport IGCC) was declared “in-service” by Duke in June 2013 and has now been operating for over 5 years. To get approval to build the plant in 2007, Duke promised legislators and regulators a price tag of $1.9 BILLION, but the final price skyrocketed to over $3.5 BILLION.

Since declaring the plant “in-service,” the Indiana Utility Regulatory Commission (IURC) has allowed Duke to charge its customers for the costs of operating the plant which include:

• the cost of fuel and the labor to run the plant, and
• the capital expenses related to fixing and repairing the plant.

Duke Energy is now asking regulators for ANOTHER rate hike to continue paying for this outrageously expensive power plant. The average Duke customer is now paying $14.81 per month for the plant, and Duke wants to hike that to $15.39 per month.

Duke Customers have paid $2.2 BILLION for the Edwardsport IGCC power plant since 2009.

• While the plant was being constructed and tested, Duke forced customers to fork over $397 MILLION for the plant.
• From June 2013 to December 2017, Duke customers were forced to pay another $1.76 BILLION for the plant.
• All told, Duke customers have had to pay $1.4 BILLION more for Edwardsport than they would have paid for electricity on the wholesale market. 
• This is a huge SUBSIDY to Duke Energy and a massive ECONOMIC LOSS for everybody who has the misfortune to live in Duke’s service territory.

Edwardsport IGCC Unable to Deliver on Promises of Efficiency

In October 2011, Duke stated:

“Importantly, due to its low operating cost, this plant will be among the first dispatched on our system which means that older and less efficient generation will operate less. This is a point that probably has not been emphasized enough. The plant's high efficiency means that it can turn fuel into energy at a lower cost; in fact, at the lowest cost on our system.”

None of those promises have come true. The O&M (Operation & Maintenance) costs of Edwardsport have been exorbitant and are easily among the highest costs on Duke’s system.

• Over the past four years, the average O&M costs for generating power at Edwardsport has been slightly over $60 per MWH (megawatt hour).
• The O&M costs for generating power at Duke’s older Indiana coal plants has averaged around $35 per MWH.
• Electricity costs on the wholesale market have averaged slightly above $31 per MWH.

Furthermore, the cost of renewable electricity such as wind and solar-plus-storage projects are coming in well below the costs for Edwardsport and are frequently below current wholesale market prices as well.

• Northern Indiana Public Service Company (NIPSCO) recently requested proposals for renewable electricity projects in its service territory.  In the proposals they received, the average cost of wind came in at $27 per MWH and the average solar-plus-storage projects came in at $35 per MWH.

Regarding Duke’s promise of “high efficiency” and turning “fuel into energy at a lower cost,” Edwardsport has utterly failed to deliver. The efficiency of a power plant is measured by its heat rate. The higher the heat rate, the less efficient the power plant. The Edwardsport plant’s average heat rate is:

• 29% higher (less efficient) than Duke promised;
• 16% higher (less efficient) than the typical coal plant; and
• 64% higher (less efficient) than the typical gas plant.

Another important factor to measure the efficiency of a power plant is what is known as “parasitic load loss.” This is how much of the electricity generated that is being diverted to run the power plant instead of going on the electric grid.

As displayed on the graphic below:

• The average gas plant diverts 3 to 4% of its electricity for use at the plant.
• The average coal plant diverts 7 to 10% of its electricity for use at the plant.
•  Through the end of 2017, Edwardsport's parasitic load averaged 30%.