INDIANAPOLIS —The Indiana Utility Regulatory Commission has wrapped up the first week of sometimes-testy hearings over the cost and management of Duke Energy's Edwardsport coal-gasification plant.
The three scheduled weeks of hearings, broken into two segments, will result in the utility commission determining whether Duke can pass on to customers the nearly $1 billion in cost overruns connected to construction of the plant. It was originally projected to cost $1.9 billion but is now billed at more than $3 billion.
Duke Energy Chairman James Rogers was grilled by the commission for the project's rising costs. Rogers said the plant's construction cost is now $5,593 per kilowatt of electricity it will generate — the most expensive project ever built, by that measurement.
The first phase of the Duke hearings will wrap up Tuesday. This round is essentially a progress report. It involves Duke executives answering questions about rising cost estimates and the utility's need for additional generating capacity.
The second phase starts Thursday and will end Nov. 10. It'll be related to allegations that Duke has mismanaged the project and intentionally concealed information.
Each day's deliberations begin at 8:30 a.m. Central time, and can be viewed online at in.gov/iurc/2624.htm. More than a dozen witnesses total are expected to be called.
Duke wants the authority to pass along $2.7 billion in construction costs to consumers.
Opponents, including the Indiana Office of Utility Consumer Counselor's office, which represents ratepayers in utility cases, are arguing for Duke's request to increase the $2.4 billion for which they can currently charge customers to be reduced down to the project's original $1.9 billion price tag.
"From the beginning, Duke grossly mismanaged the project and attempted to conceal mistakes caused by its mismanagement from the IURC and other interested stakeholders," said Barbara Smith, the Indiana Office of Utility Consumer Counselor's director of the resource planning and communication division, in testimony on July 14.
According to Danielle McGrath, a spokeswoman for the IURC, a decision will not come immediately. Both sides will have an opportunity to submit final filings, and once those are in, the IURC will deliberate and issue its decision.
Duke officials say they believe they will prevail.
"We are presenting a strong case that Edwardsport is the right plant for Indiana and that the costs and management of the project are prudent," said Angeline Protogere, Duke's Indiana communications manager.
"It's been 30 years since we last built a major Indiana power plant, and constructing a plant that meets today's environmental requirements and produces reliable power is expensive. The new generation of power plants is environmentally cleaner, but they also more costly to build."
The 630-megawatt Edwardsport plant, which will turn coal into synthetic natural gas, is nearing completion, and is expected to be up and running by the end of 2012.
"While we sort through the regulatory issues, plant construction is winding down and extensive start up testing is under way. By about this time next year, the plant will be providing cleaner, more efficient energy to Indiana," Protogere said.