Duke Energy Reaches Settlement On Edwardsport Cost; To Take $90 Mln Charge In Q3

(RTTNews) - Duke Energy Indiana and some of the state's key consumer groups have reached a settlement agreement related to operating costs at Duke Energy's Edwardsport coal gasification power plant.

As a result of the settlement provisions, Duke Energy expects to take a pretax charge of about $90 million in the third quarter of 2015.

The proposal, which was filed with state regulators today, is subject to Indiana Utility Regulatory Commission approval. If approved, the settlement would resolve all Edwardsport-related proceedings pending at the commission.

Participants in the settlement are the Indiana Office of Utility Consumer Counselor, the Duke Energy Indiana Industrial Group and Nucor Steel-Indiana.

As per the proposed settlement, the company has agreed not to bill customers $85 million of operating costs deferred since the plant's in-service date. If approved by state regulators, the remaining operating costs charged to customers will result in an approximately 2 percent customer bill increase. There will be regulatory hearings on the settlement, and a commission decision is possible in the first half of 2016.

The settling parties agree that the plant's commercial operation in-service date will remain June 7, 2013, for accounting and ratemaking purposes.

During 2016 and 2017, the company will cap annual plant operating, maintenance and capital costs billed to customers. Future regulatory filings to update plant operating costs and customer rates will be made annually rather than twice a year.

The agreement also designates $5 million, out of shareholder funds, for attorney fees, litigation expenses, and funding commitments, including a customer bill credit and additional resources for battery storage research, low-income energy assistance and the Indiana Utility Ratepayer Trust.