Over the next 12 months, Duke Energy will take apart every piece of its old Edwardsport plant at the same time the utility is putting the finishing touches on its massive replacement next door.
In October, Duke is set to begin disassembling a facility that was Indiana's only large, coal-fired power plant when it opened 93 years ago. Then, it powered the electric passenger railroads that linked some of Indiana's cities and towns.
At the same time that work is beginning, the utility will ask the Indiana Utility Regulatory Commission at an Oct. 26 meeting to sign off on its plans for the new $2.88 billion coal-gasification plant and the 16 percent rate hike that will accompany it. That facility is 95 percent finished, and is expected to open in the fall of 2012.
"We are replacing what may have been the state's first major power plant with a facility that will be the largest in the world to use this advanced coal technology to burn coal cleanly," said Angeline Protogere, a Duke spokeswoman.
The old plant opened with one unit in 1918, though that unit has not been operational for decades. Ownership of the plant has changed through mergers and acquisitions several times, and between 1944 and 1951 three more generating units were added.
Until it was recently shuttered, the plant in northern Knox County, the heart of a coal-rich portion of Southwestern Indiana, provided a maximum of 160 megawatts for the state's largest utility.
In recent years, Duke has used the old Edwardsport plant "more like a peaking facility," Protegere said. That means it's not used up to its full 160-megawatt capacity every day, but is instead kicked into gear on days that customer demand spikes — usually during the summer.
As of March 1, it was officially retired, and the company has been readying the plant for demolition since then.
That demolition won't look like an ordinary building being razed, Protogere said. It's a 12-month process that will see all the structures and equipment, including the four coal-fired boilers and four generating units, dismantled and removed from the property.
Those pieces will be sold for scrap, and the utility estimates it'll reap up to $9 million from those sales.
"The scrap value of the steel, copper and other metal actually will offset nearly all of the costs of the demolition," Protogere said.
Though at 630 megawatts, it's much bigger, Duke says the new facility will decrease emissions — both the emission rates and the total tonnage — of some pollutants, including sulfur dioxide, nitrogen oxide and mercury.
"Even though this facility is much larger and will operate around the clock, as opposed to the other facility that was much smaller and only operated a portion of the time, it will have dramatically fewer emissions of some of those key pollutants," Protogere said.
The new facility's carbon dioxide emission rate is 40 percent less than the old one's was. Still, because of the size difference, the total amount of carbon dioxide Duke projects to be emitted will increase, Protogere said.
She said the old plant was emitting 692,000 tons of carbon dioxide per year, while the new coal-to-gas plant will emit 4 million tons per year.
Kerwin Olson, the interim executive director of the environmental advocacy group Citizens Action Coalition, said Duke's underuse of its old Edwardsport facility underscores the group's argument that the new plant was never necessary.
"They never truly proved that they needed the power plant to serve their customers. The overarching argument above all else is that Duke Energy simply doesn't need the power. It doesn't need the power today," he said.
The new plant has been the subject of a state ethics scandal when Duke hired the lead attorney from the Indiana Utility Regulatory Commission, and made plans to do so while that attorney was involved in Duke's Edwardsport case.
The regulatory agency's chairman, the attorney and Duke's Indiana president were all fired as a result of the scandal.
Now, Duke is seeking to place a "hard cap" that would allow the utility to pass on to customers the costs of $2.72 billion in construction, plus financing. Therefore, any cost overruns beyond that amount would not show up in ratepayers' bills.
That's an increase from the nearly $2 billion that the agency approved for the project in 2007, but Duke President James Rogers said in testimony filed Sept. 9 that costs have increased since then.
"The fact is that this project cost more than anyone reasonably thought it would when we started down this path," Rogers said.
"However, that does not mean the company acted imprudently, let alone engaged in acts of fraud, concealment or gross mismanagement."
Meanwhile, the Indiana Office of Utility Consumer Counselor, which represents ratepayers in regulatory hearings, is arguing that Duke should only be able to pass on to customers the original $1.985 billion that the commission approved in 2007.