Posted by: Lawyer Sanders | December 1, 2009

Kentucky environmental attorney Sanders says Duke Energy’s costs are increasing for clean coal technology plant in SW Indiana to growing dismay of ratepayers.

Duke Energy filed a progress report with the Indiana Utility Regulatory Commission (“IURC”) on the status of its “clean coal gasification power plant” under construction in southwest Indiana. The update included a revised cost estimate of $2.35 billion for the plant. That means costs have gone up $365 million for the project.

If approved, the $365 million cost increase would result in approximately an additional 2 percent rate impact on customers between 2008 and 2013.  It remains to be seen whether Duke can live up to its many promises to deliver “clean coal” energy to  ratepayers  in Indiana.

The IURC granted the company permission in November to construct the clean coal power plant in Edwardsport, Ind. The commission will need to approve any cost increase for the plant. The plant is scheduled to be completed in 2012.

If everything works as Duke promises, the 630-megawatt plant will use advanced integrated gasification combined cycle technology.  According to Duke, the new plant will produce 10 times as much power as the existing plant at Edwardsport, yet it will emit less sulfur dioxide, nitrogen oxide and mercury than the plant it replaces.  

Moreover, Duke claims that the plant will emit 45 percent less carbon dioxide per megawatt-hour than the existing facility.  Wow, in my mind those are some honking big promises to fulfill.

Integrated gasification combined cycle technology uses a coal gasification system to convert coal into a synthesis gas (“syngas”). The syngas is processed to remove sulfur, mercury and ash before being sent to a traditional combined cycle power plant, using two combustion turbines and a steam turbine to efficiently produce electricity.  

In a bold prediction, Duke’s technology could also remove the carbon dioxide from coal during the syngas conversion process to enable it to be stored or sequestered in underground geologic formations. However, that process may be many years away. 

Duke only recently filed with state utility regulators a request for approval of plans for studying partial carbon capture and underground storage at the plant. If approved, the studies would look at the plant site’s suitability and costs for capturing and storing carbon dioxide, a primary greenhouse gas.

The Edwardsport project is the first major new coal-fired power plant to be constructed in Indiana in more than 20 years.  The Indiana State Utility Forecasting Group predicts that Indiana will need new power generation equal to five projects the size of this plant by that same time period.  

The new power plant is slated to receive more than $460 million in local, state and federal tax incentives, which will help reduce the customer cost impact. The project will result in an average customer electric rate increase of a whopping 18 percent phased in from 2008 through 2013.

Duke Energy selected an existing power plant site in Edwardsport, Ind., for the project. The company currently states that it will retire the existing plant – with coal and oil units built between 1944 and 1951 – upon completion of the new facility.  Only time will tell if Duke lives up to its many promises to the ratepayers of Indiana.  Let’s hope so.

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