Today, a broad-based coalition of local, state, and national consumer and environmental organizations issued a letter to Governor Mitch Daniels urging him to support a sustainable energy policy and to withdraw his support for a coal gasification plant proposed by Duke Energy (formerly PSI Energy) for Knox County.

Although the Indiana Utility Regulatory Commission has yet to determine if building the expensive new facility is in the interest of ratepayers, Governor Daniels has openly endorsed the plant. Indeed, Governor Daniels recently issued a statement saying the plant “will” be built, which, the groups say, demonstrates a disregard for the Commission review process now under way and raises questions about improper communications with the Commission, a quasi-judicial body whose members cannot communicate with individuals about pending cases.

Among the points raised in the letter was the fact that the projected costs for the plant have nearly doubled within just one year and now are projected to be at least 2.1 billion dollars. Those costs also fail to include the additional cost of complying with future regulations on carbon dioxide, or CO2, a gas that contributes to global warming. If approved, the plant could result in a 15-20% rate increase, before adding the costs of compliance with carbon regulations.

The organizations also challenged the wisdom of investing ratepayer dollars in new, unproven technology. Duke CEO Jim Rogers was recently quoted in Newsweek stating that “clean coal” technologies have not yet been proven successful for plants of 600 or 1000 megawatts. As proposed, the Knox County plant is 630 megawatts.

“The growing costs of this plant make it clear that Duke’s proposal is neither prudent nor reasonable. The proposed new coal plant is far from the least cost approach to serving Duke Energy customers, and therefore should be denied as a matter of law and sound energy policy. We urge the Governor to look at the reality of this costly proposition and instead pursue a sustainable policy that will provide good jobs while controlling rising energy costs. Duke ratepayers should not be engaged in subsidizing a multi-billion dollar power plant which private investors are unwilling to pay for on their own,” said Grant Smith, Executive Director of the Citizens Action Coalition of Indiana.

“Too many Indiana households are already struggling with rising heating and health care costs. We are concerned that this project could mean significantly higher utility bills for our members,” said Nancy Griffin, AARP Indiana State Director.

Tyson Slocum of Public Citizen said, “We support the ratepayers in Indiana who should not be forced to pay for a risky, unproven technology when cheaper, cleaner alternatives are available today. We need a national energy policy that promotes energy efficiency and renewable energy sources such as wind rather than pursuing a costly build and burn approach that fails to address our long term economic and environmental security.”

The plant will increase emissions of a variety of hazardous pollutants and would emit a projected 3.5 million tons of additional CO2 per year. The Coalition believes new centralized fossil-fuel fired power plants should only be considered when and if they include carbon capture and sequestration technology, and other least cost alternatives such as efficiency and renewables have been fully developed.

John Blair of Valley Watch says “There is nothing clean about coal, and we cannot fight global warming by burning more of it. Southern Indiana has paid a heavy price over the years due to the high concentration of coal fired power plants. Public health has suffered, and positive economic development has been stifled, leaving a legacy of polluted ground water, land and air. Governor Daniels and Duke Energy are taking a 19th century approach to energy and economic development that fails to move Indiana toward a sustainable energy future.”

Smith concluded, “Not only should construction of the plant be denied, there are troubling indications that the IURC process has been compromised. When the Governor states publicly that the plant ‘will’ be built before the Commission has considered all the evidence and issued an order, it raises questions of whether the IURC is being allowed to independently weigh whether this project is in the best interest of ratepayers.”

Click on the title of this article or on "Read More" to read the text of the letter.

The Honorable Mitch Daniels
Governor of the State of Indiana
Statehouse
Indianapolis, IN 46204

September 4th, 2007

Dear Governor Daniels,

The undersigned environmental and consumer organizations oppose the approval for construction of Duke Energy’s proposed integrated coal gasification power plant at the current Edwardsport facility in southwest Indiana (Knox County) for the following reasons:

• The cost for the plant has nearly doubled in the past year, and is now projected to be at least 2.1 billion dollars not including carbon capture and sequestration.


• The construction of the plant would lead to significant rate increases for Duke/PSI customers even though cheaper, cleaner alternatives exist to meet electric demand and would maintain greater stability in electric bills for residential and business ratepayers.


• If the plant were built, there would be a net increase in carbon dioxide emissions from the Duke system without any prospect for capture and sequestration technology add-ons by the time the plant is completed.


• If the plant were built, there would be net increases in particulate emissions, responsible for numerous pre-mature deaths and severe lung disease problems in Indiana.


• More jobs can be created and cleaner air achieved if Duke Energy were to shift investment from the plant to end-use energy efficiency for homes and businesses, renewable energy technology, and combined-heat-and-power projects at industrial facilities.


• Overwhelming evidence exists that an emphasis on diversification and decentralization of the electric energy mix would result in a much stronger economy and a much cleaner environment while allowing us to meet electric energy demand and address global warming in an economically sound and cost-effective manner.


• New, centralized, fossil-fuel-fired power plants, particularly those based on commercially unproven technology (which is the case with respect to the Duke proposed coal gasification plant), should be considered only when carbon capture and sequestration technology is available and site-specific conditions are compatible with sequestering the carbon dioxide emissions from a plant, and only after end-use efficiency, combine-heat-and-power and renewable technology options have been exhausted.

Therefore, we, the undersigned organizations, respectfully request that you:

• Withdraw your support for the proposed Duke coal gasification plant; and,


• Endorse a state energy policy that emphasizes end-use energy efficiency, renewable energy technology, and distributed power prior to investing in more fossil-fueled generating capacity.

Please respond, in writing, to the organizations listed below at your earliest convenience with your thoughts on our request.

Sincerely,

cc. Indiana Utility Regulatory Commission, Indiana Office of Utility Consumer Counselor, elected officials, and the media