Duke Energy is waiting for a ruling from the Indiana utility customer advocate as the whether it will be allowed to pass along costs of repairing its damaged southern Indiana energy plant onto its almost 800,000 Indiana customers.
An Indianapolis lawyer who has experience in defending the utility interest of large companies throughout the state has told the Indianapolis Star that the troublesome powerplant was put into service too early as Duke sought to take advantage of a settlement that would see it charge its energy rate payers more to offset part of its $3.5 billion cost.
This settlement put a cap on the amount that Duke could offset by higher energy prices at $2.6 billion allowing the construction cost effectively paid by thecompany to be little more than a quarter of its overall cost, which also nearly double form its initial $1,9 billion projection.
According to the same lawyer, Duke Energy seeks to offload plant repair costs on Indiana customers by taking advantage of another legal loophole. The initial cap was agreed for construction costs only and was available until the plant was put into service. However, due to its timely inauguration, the North Carolina-based company has had to repair the plant in several instances after it was put into use, and those costs technically fall outside of the cap into the “operation and maintenance” category.
This effectively means that tens of millions dollars amounting to repairs of the plant might be put into higher electrical bills from the approximately 790,000 Duke customers in Indiana, which would cover both repair and operation costs between Aprils 2013 and March 2014. If Duke’s request is approved, this would add on average $2.40 per month on energy bills of Indiana residential customers.
The plant itself, which produces energy by coal gasification, has been marred by trouble since its inauguration in 2013, further lending substance to the report of it being put into use too early. The first time it broke down was just six days after it was opened, as its wastewater vaporizing fans had already been damaged; it was then kept inactive more than a month for repairs.
Other minor problems have also been reported at the plant, from corroded pipes to broken shafts. Worse than that though is the fact that the plant has only been producing energy at an average of 41 percent of its total capacity, even though Duke points out that it increased to a 75 percent output in March 2015.
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