Consumer advocates slam Duke's Indiana costs

Advocates for Indiana utility customers have given a thumbs-down on Duke Energy's request to recover more of the escalating costs of its Edwardsport coal-fired power plant.

The Indiana Office of Utility Consumer Counselor had been generally supportive of the project, which will use cleaner-burning gasification technology and is now nearing completion.

But that began to change last winter, with the fallout over conflict-of-interest allegations between Duke and Indiana utility regulators that ultimately cost the job of Jim Turner, one of Duke's top executives in Charlotte. Duke later withdrew a settlement with the consumer agency and other parties on the Edwardsport cost overruns.

With the issue back before the Indiana utilities commission, the Consumer Counselor's office now says Duke doesn't deserve the extra $530 million in reimbursement it's seeking for cost overruns. Cost estimates of $2.35 billion in 2008 have climbed to $2.88 billion.

"Duke has not demonstrated any budgetary constraints on this project," the office's Barbara Smith wrote in pre-filed testimony to the commission. "There appears to be a lack of responsibility or accountability on the part of those causing these multi-million dollar cost overruns. In addition, there has been no evidence presented to indicate that Duke management, or any other entity, has conducted any kind of timely prudency review regarding these cost overruns."

Smith wrote that Duke didn't fully spell out the project's scope, or finish design work, before starting work. The result, she said, was escalating costs borne by ratepayers and benefits going to Duke shareholders.

Duke has defended its management of the project. The Indiana Utility Regulatory Commission will hold hearings on Edwardsport's costs in October.