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Thursday, December 09, 2010

Ind. Gov't. - "Ethics issue kills a Duke Energy deal on Indiana plant costs"

That is the headline late this afternoon of a story by John Downey in the Charlotte Business Journal. It begins:

Duke Energy has withdrawn a proposed settlement worked out with several Indiana customer groups on approving the new, $2.88 billion price tag for the company's Edwardsport coal gasification plant.

Duke and the customer groups hope to negotiate a new settlement that will not be tainted by the recent ethics inquiries that have rocked Duke and the Indiana Utility Regulatory Commission. * * *

In a filing with the commission today, Duke says Jim Turner, who headed Duke’s regulated utilities, and former Duke Indiana President Mike Reed were part of the team that negotiated the settlement with the Indiana Utility Customer Counsel, the Duke Energy Indiana Industrial Group and Nucor Steel-Indiana.

Here is the Duke Energy press release, headed "Duke Energy Indiana, Consumer Groups Agree to Renegotiate Edwardsport Cost Settlement Agreement." A quote:
"This action is the best path forward for the Edwardsport project at this time," said James E. Rogers, Duke Energy chairman, president and chief executive officer. "While we are disappointed the original settlement is being withdrawn, we understand the parties' desire to negotiate a new settlement that is separate and apart from recent events.

"The support and cooperation of the settling parties is important to us, so we have agreed to re-examine and renegotiate the terms of the cost settlement. The merits of the Edwardsport plant are strong and construction continues to move forward. The total project is about 80 percent complete and we are on track to finish the plant by the fall of 2012."

"The OUCC continues to support the Edwardsport project for the reasons our agency has stated on numerous occasions," said Indiana Utility Consumer Counselor David Stippler. "However, due to recent revelations about communications between Duke Energy and the former IURC chairman, our office has called into question the integrity of the process that led to the settlement agreement. For these reasons, it is appropriate to reopen the negotiation process and take a fresh look at the issues addressed in this case."

The settlement was to be considered by the IURC Dec. 13 and 14. The groups have proposed a new schedule for commission consideration of the revised cost with hearings that -- if approved -- may begin as early as mid-March. Those dates are dependent upon commission scheduling and approval.

Here is John Russell's story for the Indianapolis Star, also filed late this afternoon, headed "Deal on $3B Duke Energy plant comes undone." It begins:
A fragile agreement on cost overruns at Duke Energy Corp.'s coal-gasification plant in Edwardsport has collapsed, at least for now, after some parties raised concerns about the contents of secret e-mails of key players that were recently disclosed in the Indianapolis Star.

The concerns were raised in a filing this afternoon at the Indiana Utility Regulatory Commission.

Today's petition throws into question the future of the $2.9 billion plant, which is about half-built, and whether Duke will be able to recover additional money due to cost overruns.

The key players, including Duke, its large industrial customers and the Indiana Office of Utility Consumer Counselor, filed the petition, saying they want to assess whether a tentative agreement reached in September "remains a reasonable allocation of risks and reward."

This was the CWIP agreement.

[More] Here is the text of the docket entry ordered today in CAUSE NO. 43114 IGCC 4 SI:

You are hereby notified that on this date the Indiana Utility Regulatory Commission ("Commission") has caused the following entry to be made:

On September 17, 2010, Duke Energy Indiana, Inc" the Indiana Office of Utility Consumer Counselor, Duke Energy Indiana Industrial Group, Nucor Steel - Indiana, a division of Nucor Corporation (collectively, the "Settling Parties") filed their Settlement Agreement.

On December 9, 2010, the Settling Parties filed Settling Parties' Joint Notice of Withdrawal of Settlement Agreement and Motion for Continuance of Hearing ("Motion"), The Motion notified the Commission of the Settling Parties' decision to withdrawal the Settlement Agreement reached among the Settling Parties on September 17, 2010 and requested the December 13, 2010 hearing on the Settlement Agreement be converted to an attorneys' conference to discuss a proposed procedural schedule, The other parties, Citizens Action Coalition, Save the Valley, Valley Watch, Sierra Club and Steel Dynamics, Inc, do not oppose the Motion.

The Presiding Administrative Law Judge, having reviewed the Motion and being duly advised in the premises, hereby converts the December 13, 2010 settlement hearing into an Attorneys' Conference to discuss establishing a modified procedural schedule and evidentiary hearing date. The Attorneys' Conference shall commence at 9:30 a.m. on December 13, 2010 in Room 222 of the PNC Building, 101 West Washington Street, Indianapolis, Indiana.

IT IS SO ORDERED.
David E. Veleta, Administrative Law Judge

Posted by Marcia Oddi on December 9, 2010 06:37 PM
Posted to Indiana Government