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Thursday, October 20, 2011

Ind. Gov't. - Duke Energy, the Edwardsport plant, and the IURC scandal back in news today

"Ethics scandal costs Duke Energy in two rulings" is the headline to this lengthy story by Chris O'Malley in the Indianapolis Business Journal. Yesterday, Oct. 17th the IURC:

reversed a ruling made by former chief counsel and administrative law judge Scott Storms. It would have allowed Duke at its next rate case to seek to recover from ratepayers $12 million in costs the utility incurred during a 2009 ice storm.

Also on Wednesday, the commission dismissed a case handled by Storms in which Duke sought permission to tap ratepayers to install "smart" electric meters in central Indiana to help better regulate loads. That project was estimated to cost $22 million.

The case in which Duke sought to collect storm damage costs is most notable. It was the only Scott Storms case the commission decided to reopen for further review after the ethics scandal came to light last year.

Near the end of the long story:
Kerwin Olson, interim executive director of utility watchdog group Citizens Action Coalition, said he was still trying to make sense of the IURC rulings late Wednesday.

Olson noted that the commission in these two cases made decisions that centered on orders involving Storms. Yet the commission isn’t taking into consideration Storms’ rulings involving Duke’s controversial Edwardsport coal-gasification plant, which has $530 million in cost overruns.

“I fail to understand the difference,” Olson said.

From the Indianapolis Star today, no mention of the yesterday's rulings, but a very long front-page story by John Russell headed "Many documents on Duke's Edwardsport plant remain hidden from public." Like the IBJ story, the Star story is meaty and should be read in full. "Duke Energy's $2.9 billion Edwardsport power plant will take center stage in two hearings starting next week. One hearing "will review the plant's progress reports, cost estimate increases, the need for additional capacity and how reasonable it is to continue the project." The other "will address allegations against Duke of fraud, concealment and gross mismanagement." The focus of the story is the redaction of much of the content of many of the documents to be used in the hearings:
Much of the hearings could wind up being held behind closed doors. Every time a redacted document is brought up for discussion, the commissioners will have to clear the hearing room.
More from the story:
Tim Stewart, a lawyer for Lewis & Kappes, which represents Duke's industrial customers, said he is working with Duke to unredact "substantially all" of its testimony. But as of Wednesday, the two sides had not reached an agreement.

He said his clients have been frustrated by the sweeping redactions. For example, one of Stewart's witnesses is Michael Banta, a retired utility lawyer and former executive with Indianapolis Power & Light Co. Banta testified in writing, prior to the hearings, that Duke concealed vital information from Indiana regulators. But more than 80 pages of his testimony have been redacted by Duke as "confidential."

Another redaction keeps secret a meeting with Daniels.

Duke met privately with regulators and other state officials to discuss the plant but said it did not break any laws because the meetings were only procedural. Under state law, utilities and other interested parties are prohibited from holding private meetings with regulators on pending matters.

On Feb. 24, 2010, Duke CEO Rogers and his top lieutenants met with Hardy, then chairman of the IURC, at a private breakfast at the Capital Grille restaurant Downtown. Duke said it did so only to give Hardy a heads-up on the latest cost estimates at the plant.

Several hours later, Rogers was set to meet with Daniels when he and Turner received an email from Hardy with the subject line, "terseness."

"Whoever reports on the meeting might consider a one-word characterization and a number where you can be reached," Hardy wrote.

Turner wrote back: "Got it."

What was said in that meeting with the governor remains a mystery to outsiders. No report has ever been released to the public.

Posted by Marcia Oddi on October 20, 2011 09:10 AM
Posted to Indiana Government