Letters from State Representatives to the Office of Utility Consumer Counselor Opposing the Duke IGCC Plant

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The following are letters to the Office of Utility Consumer Counselor (OUCC) written by State Representatives Matt Pierce, Dennis Avery, and Phil Hoy in opposition to Duke's proposed "clean coal" coal-gasification (IGCC) power plant.

You can download the PDF of the following letter by Representative Matt Pierce by clicking here.

July 6, 2007

Ms. Susan L. Macy
Indiana Utility Consumer Counselor
100 N. Senate Avenue, Room N-501
Indianapolis, IN 46204

Re: Docket 43114

Dear Ms. Macy:

I am writing to express my concern about Duke Energy's proposed integrated coal gasification combined cycle electric generating facility. As proposed, the power plant will significantly increase the cost of electricity and the amount of carbon dioxide released into the atmosphere at the very moment global climate change has been recognized as the major threat to our environment. Because promoting energy efficiency and renewable forms of energy is a less expensive alternative to meet Indiana's future energy needs, the coal gasification plant does not satisfy the General Assembly's requirement that the Indiana Utility Regulatory Commission (IURC) only approve proposals that are "reasonable and necessary."

It is particulary unfair for consumers to shoulder all of the risk while Duke Energy (perhaps along with Vectren) reaps all of the rewards. As I understand it, Duke wishes to have its customers pay for the studies and plans necessary even to consider building the plant, then pay for the plant while it is being constructed although not a single watt of electricity will have been yet generated, continue to pay for electricity from the plant even if there are lower cost alternatives, and, finally, add additional profit through an "incentive" return on equity. Duke seeks this indemnification from harm for a technology that may not prove economically or environmentally viable.

While the plant will result in some reduced emissions, running it at a higher capacity than the existing plant will cause signifcant net increases in other pollutants such as lead and add to the problem of global climate change by releasing more carbon dioxide into the atmosphere. Even if the plant could reduce all other pollutants to zero, its large release of carbon emissions will directly thwart any efforts to meet carbon reduction targets. Ratepayers will likely suffer another round of cost increases when anticipated new federal carbon emission regulations force Duke to implement some kind of carbon sequestration technology or purchase carbon credits under a "cap and trade" system.

Proponents of the new power plant make much of Senate Bill 29 that was adopted by the General Assembly in 2002. It is true legislation was passed with the hope that a way could be found to burn Indiana coal cleanly and economically. However, it was not meant to be a blank check. The General Assembly directed the IURC to approve proposals only if the costs are "reasonable and necessary." This proposal meets neither standard.

First, the estimated 13% cost increase to consumers for the new facility is not reasonalbe when other less expensive alternatives are available. Second, constructing the plant is not necessary to meet the state's future energy needs.

There is a better way to meet Indiana's future energy needs that avoids environmetnal problems and huge rate increases for consumers. Promoting renewable forms of energy, distributed power and energy efficiency can do more tokeep Indiana electricity affordable and protect our environment. Senate Bill 29 specifically notes the importance of renewable forms of energy in IC 8-1-8.8-1(a)(2).

(2) The development of a robust and diverse portfolio of energy generating capacity, including the use of renewable energy resources, is needed if Indiana is to continue to be successful in attracting new businesses and jobs. [emphasis added]

For these reasons, I urge your office to do all that it can to protect the interests of consumers and ensure the IURC adheres to the General Assembly's mandate to approve only projects that are "reasonable and necessary."

Sincerely,

Matt Pierce
State Representative

cc: IURC Commissioners


You can download the PDF of the following letter by Representative Dennis Avery by clicking here.

May 22, 2007

Ms. Susan L. Macey
Indiana Utility Consumer Counselor
N501 Indiana Government Center North
100 North Senate Avenue
Indianapolis , IN 46204

Dear Ms. Macey:

As an Indiana state representative serving a substantial portion of Vectren's service territory, I am concerned about the environmental and rate impacts of their proposal to join with Duke Energy to construct a new coal fired plant at Edwardsport. Your office just settled gas and electricity rate cases from Vectren that will almost certainly cause economic stress for many of my constituents. The issuance of a Certificate of Need for additional capacity without first demanding substantial increases in efficiency, conservation, and maximum use of renewable energy, at both the production and consumption levels, seems shortsighted and premature.

This is especially important at a time when we very well could see substantial increases in the price we pay for electricity once Congress passes imminent legislation to constrain the emission of carbon dioxide. When that happens, Indiana 's reliance on coal as its main energy source could drive our electric rates to even higher levels.

I am especially concerned since rumors abound that much of Vectren's portion of this plant is actually intended for off system sales. Indiana already exports much of its energy production and ranks third in the nation in the production of electricity per capita at more than 20 megawatt hours per person per year.

Specifically, I would like for your office to give very serious consideration and scrutiny to particular issues relating to this matter.

First, I ask that you pay particular attention to the ratepayer impacts the construction of the plant will have on my constituents, using well qualified experts to analyze those impacts using true cost estimates of what these plants are costing in other areas of the country.

Second, I ask that you find out just how much electricity is already exported out of state and being sold at wholesale prices while my constituents are forced to pay retail prices and pay for the construction of power plants that may not be needed.

Third, I would ask that you compel both Duke and Vectren to create bigger and better efficiency programs that could eliminate the need for this or other coal fired power plant construction in Indiana.

Fourth, I would ask that you require options for renewable energy, particularly wind, be pursued in light of the serious carbon constraints that we will face in the future.

Last, I would ask that you demand Duke and Vectren hire a reputable firm to study the “total” cost attributable to coal fired electricity production in Indiana . For too long, Hoosiers have been subsidizing the “cheap” electrical rates we have in this state with ill health and contaminated air and water.

Until these “externalized costs” are recognized as costs, reasonable consumers cannot make sound decisions as to the kind of electrical use and forms of production which make the most sense.

Please keep me posted regarding the progress in this case. I would also hope that prior to any issuance of the Certificate of Need there will be opportunity for the public in Southwestern Indiana to be heard as part of the record of this case. Such a hearing is vital to the democratic process since it is clear this plant will have significant impact on this region should it be allowed to move forward.

I will be very grateful for your consideration of my comments.

Sincerely,

Dennis T. Avery
State Representative


You can download the PDF of the following letter by Representative Phil Hoy to the Office of Utility Consumer Counselor by clicking here.

June 5, 2007

Ms. Susan L. Macey
Indiana Utility Consumer Counselor
100 N. Senate Avenue, Room N-501
Indianapolis, IN 46204-2215

Dear Ms. Macey:

I am writing to convey my concern – and the concern of the Indiana residents (and Vectren Energy customers) I represent – about plans for a new coal-fired electric generating plant at Edwardsport, Indiana.

Many of my constituents already are facing financial hardship because of Vectren rate increases. The proposal by Vectren and Duke Energy can only exacerbate that hardship. In the last year, construction estimates for the plant have nearly doubled, and it is my understanding that current estimates do not include other factors such as carbon capture and sequestration that could increase the cost of the plant by 50 percent or more.

Before a Certificate of Need is granted, I respectfully request that you thoroughly investigate all of the ramifications of allowing this proposal to go forward. The citizens of Indiana are entitled to answers to the following questions:

  • What financial impact will the construction of the plant have on our region’s consumers? What has been the cost of such plants in other areas of the country?
  • Is it true that much of the electricity generated at the new plant will be exported to other states? How much electricity is now being exported out of state at lower prices than those paid by Indiana taxpayers, while our citizens pay the additional health costs of living in a state that is already third in the nation in the production of electricity per capita?
  • Isn’t it past time to demand renewable energy options, as well as more efficient programs from Vectren and Duke Energy – programs that could eliminate the need for more coal plant construction in Indiana?

Finally, before a Certificate of Need is issued, I ask that you, as the advocate for Indiana utility consumers, insist upon a public hearing – giving the citizens of Southwestern Indiana a voice in a decision that will affect them the most.

As this case moves forward, I would welcome your thoughts and any other information you could share. Thank you for your time and consideration.

Sincerely,

Phil Hoy, Indiana State Representative, District 77