Duke Energy to Retire Wabash River Coal Units in Settlement with Indiana Citizens Groups

Groups Continue to Fight Duke’s Edwardsport Cost Overruns in Indiana Court of Appeals

INDIANAPOLIS–(ENEWSPF)–August 30, 2013.  A coalition of Indiana environmental and citizens groups including the Sierra Club, Citizens Action Coalition, Valley Watch, and Save the Valley announced a legal settlement today that requires Duke Energy Indiana to cease burning coal at most of its Wabash River coal-fired power plant in Vigo County and to invest in new renewable energy projects.

Under the terms of the settlement, Duke Energy will retire units 2, 3, 4, and 5 at the Wabash River plant and will also stop burning coal at Wabash River unit 6 by June 1, 2018. A total of 668 megawatts of coal-fired power will come offline as a part of this agreement. 

Duke Energy also agreed to pursue either a new feed-in tariff program to purchase at least 30 megawatts of solar power from its Hoosier customers or to purchase or install at least 15 megawatts of wind or solar generating capacity from new facilities built in Indiana. A feed-in tariff enables customers to earn money from their own solar panels by selling excess power back to electric utilities.

“While today’s settlement is a step in the right direction, more must be done to ensure that Hoosier families are protected from rising energy bills and the enormous health threats posed by Indiana’s reliance on coal-fired power plants,” said Jodi Perras, Indiana campaign representative for the Sierra Club’s Beyond Coal campaign. “Hoosiers want clean, renewable energy and local jobs. Duke Energy and other electric utilities need to step into the 21st century and continue to move beyond coal.”

The settlement ends an appeal of Duke’s Title V air pollution permit issued by the Indiana Department of Environmental Management for the Edwardsport coal-gasification and combined-cycle power plant. However, it does not end the parties’ parallel case before the Indiana Court of Appeals to overturn Indiana Utility Regulatory Commission (IURC) decisions regarding the Edwardsport plant, which is more than $1.6 billion over budget and still not operating at full capacity after eight years of design, construction, and testing. 

According to estimates from the Clean Air Task Force, the Wabash River plant currently contributes to 74 deaths, 110 heart attacks, and 1,200 asthma attacks each year.

“Any progress toward greater utilization of renewables and less dependence on fossil fuels like coal is a step in the right direction,” said Richard Hill, senior advisor for Save the Valley. 

The Edwardsport coal gasification plant has been mired by scandals involving cozy relationships between Indiana regulators and Duke Energy executives, corporate malfeasance, and soaring cost overruns. The total cost of the Edwardsport coal-gasification project stands at $3.5 billion, an enormous overrun of the initial cost estimate of $1.9 billion. In July, mechanical problems at the plant caused it to cease operation just six days after being declared “in-service” by Duke Energy. Citizens Action Coalition, Save the Valley, the Sierra Club, and Valley Watch have appealed the Indiana Utility Regulatory Commission’s December 2012 approval of additional rate increases tied to the Edwardsport coal gasification plant, and will file briefs by September 9th in the case pending before the Indiana Court of Appeals. 

At stake in the appeal are: 1) whether the IURC violated the law by failing to consider the long-term costs to Duke Energy ratepayers of controlling the plant’s carbon pollution, despite the fact that the issue was raised in testimony by citizens groups and ignored in the IURC’s decision, in violation of Indiana law; 2) whether the IURC should have appointed a Special Administrative Law Judge to conduct a formal investigation into reports of behind-closed-doors communications, undue influence, conflicts of interest, and other misconduct involving high-level officials of Duke Energy and the IURC; and 3) whether the IURC failed to act as an impartial judge by directing Duke Energy to hire an outside consultant to monitor problems at Edwardsport and report to the IURC on its progress, and then refusing to place the reports into the public record.

“Citizens Action Coalition is certainly pleased that Duke has committed to permanently moth-balling a dirty coal-fired power plant. However, we and our allies will remain diligent in continuing our fight against the scandal-ridden Edwardsport IGCC power plant. Ratepayers should not be forced to pay one more penny for that fiasco,” said Kerwin Olson, executive director of Citizens Action Coalition.

In a 2012 poll released by the Sierra Club, 81 percent of Duke Energy ratepayers favored expanding renewable energy sources, such as solar and wind energy, in Indiana. Additionally, by more than a two-to-one margin, ratepayers supported phasing out some of the state’s coal-fired power plants and replacing them with local renewable energy sources.

“States like Iowa and Michigan are already reaping the enormous benefits that come with the expansion of clean, renewable energy like wind and solar. Iowa today gets more than 25 percent of its power from local wind energy, and Warren Buffett’s MidAmerican Energy recently announced a wind-power investment that is the largest economic-development investment in Iowa history. Michigan and Ohio both rank in the top 10 nationally for jobs in the solar industry,” said Steve Francis, chair of the Sierra Club’s Hoosier Chapter. “This is the direction we need for Indiana, a state that holds enormous potential for renewable energy development. This settlement will help create local Hoosier jobs in growing renewable energy industries.”

Since January 2010, more than 50,000 megawatts of coal-fired power have been retired or committed for retirement nationwide.

Link to agreement: LINK


BACKGROUND: Indiana gets more than 90 percent of its electricity from burning coal. Coal-fired power plants are the nation’s largest source of mercury, sulfur dioxide pollution, carbon pollution, and many other pollutants that can trigger heart attacks and contribute to respiratory problems.

Source: sierraclub.org