INDIANAPOLIS (AP) — Duke Energy has agreed
to retire five coal-fired power plants in western
Indiana by June 2018 under a settlement announced
Friday with environmental and citizens groups
that also calls for the company to increase its
investments in renewable energy.
A state administrative law judge oversaw the
settlement, which was signed Wednesday by Duke
Energy, the Sierra Club, Citizens Action Coalition,
Valley Watch and Save the Valley.
The settlement ends the activist groups' challenge
of Duke Energy's state air permit for its new
$3.5 billion, coal-gasification plant that went
online this summer. That southwestern Indiana
plant was the subject of an ethical flap after
Duke officials and regulators were found to be
discussing the project's rising costs.
The 618-megawatt plant's original 2007 cost
estimate was $1.9 billion, but that eventually
ballooned to about $3.5 billion. Duke Energy
has said ratepayers can expect to see a 14 percent
to 16 percent increase in their monthly bills
by early 2014 as a result of the higher costs
of the plant near Edwardsport, about 60 miles
north of Evansville.
Jodi Perras, who oversees the Sierra Club's
Beyond Coal campaign in Indiana, said the settlement
will help reduce Indiana's air pollution from
power plants that worsens respiratory ailments.
Indiana currently gets more than 90 percent
of its electricity from coal-fueled power plants.
"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," Perras said in a statement.
Under the settlement, Duke Energy has agreed
to retire by June 1, 2018, four coal-fired
power stations at its Wabash River Station
in West Terre Haute that date to the 1950s
and generate a combined 350 megawatts of power.
The Charlotte, N.C.-based company had previously
announced that it planned to shutter those plants
by a 2015 deadline to comply with new federal
restrictions on mercury emissions. But the agreement
specifies Duke must complete moth-balling those
plants by the 2015 deadline or — if the
mercury rule is vacated or delayed — by
June 1, 2018, whichever occurs first.
Duke has also agreed to stop burning coal at
a fifth station at the Wabash River Station by
June 1, 2018. The company is exploring possibly
refitting that 318-megawatt plant to burn natural
gas and the settlement does not prevent it from
making such a conversion before the deadline.
"We're glad to resolve these issues. Our
new, cleaner Edwardsport plant modernizes our
fleet and enables us to retire older, coal-fired
generation," Duke Energy Indiana President
Doug Esamann said in a statement.
The company's settlement includes a renewable
energy commitment calling for Duke to either
implement a 30-megawatt "feed-in tariff" for
solar power or build or otherwise contract for
15 megawatts of wind and/or solar generation.
Feed-in tariffs offer a set, long-term price
for green energy based on such factors as a project's
type and size.
Under the settlement, if Duke opts to pursue
the 15-megawatt option, it must also retire by
June 1, 2018, two decades-old oil-fired peaking
stations called the Miami Wabash and Connersville
units, which generate about 166 megawatts. Those
small power units are used only during times
of high power demand.
The agreement also states that if Duke Energy
seeks the 15-megawatt renewable energy option,
the four power plants it will be mothballing
must be retired by the mercury rule compliance
deadline or by June 1, 2017, whichever comes
Although the settlement ends the activist groups'
challenge to the Edwardsport plant's air permit,
it does not affect their case now before the
Indiana Court of Appeals seeking to overturn
Indiana Utility Regulatory Commission rulings
related to the plant's cost overruns totaling
more than $1.6 million.
"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.