In February 2025, Duke filed a proposal (Cause Number 46193) at the Indiana Utility Regulatory Commission (IURC) to retire the two coal-fired units at Cayuga, and replace them with two new fossil gas units. This new request comes right on the heels of Duke's 2024 rate hike, when they received approval to collect $244.4 million more from customers every year, resulting in a $19/month rate hike for the average Duke ratepayer. 

CAC is working to protect consumers and our environment from Duke’s greedy request. We have intervened in this case and will advocate for Hoosiers throughout the entire regulatory process. We expect that the IURC will make a decision and issue a final order sometime around October 2025. 

Unaffordable: $3.3 Billion and Counting

Duke estimates that the price tag to build the new gas power plant will be a whopping $3.33 billion, although this is subject to rise. In fact, Duke admitted the price tag could be up to 30% higher. 

This eye-watering amount is only the beginning. For example, Duke estimates that it will charge ratepayers an additional $5.3 billion in financing costs (much of which is profit for Duke's shareholders) over the planned 35-year operating life of the power plant. 

But Duke won’t stop there. If the IURC approves this proposal, customers will also be on the hook for future rate hikes to pay for: 

• A new pipeline to serve the plant

• Operation and maintenance costs to run the plant 

• Fuel costs to supply the plant

Hoosiers cannot afford any more rate hikes. Throughout Duke’s 2024 rate case, people across Indiana submitted thousands of written comments and hours of verbal testimony through field hearings in Terre Haute, Bloomington, Fishers, and New Albany, sharing how difficult it is to keep up with Duke bills on top of increases for other essential needs like food, housing, and healthcare. 

Duke’s $3.3+ billion request is especially concerning considering that Duke and their parent company - one of the largest energy holding companies in the U.S. - are raking in massive profits as Hoosiers are forced to make tough decisions daily. 

Proposal Harms Our Wallets & Our Environment

CAC strongly supports the decision to retire the two Cayuga coal-burning units. The existing coal units are the oldest plants that Duke owns and they should have retired them years ago. They are expensive and create pollution - including coal ash that contaminates our water and harms public health. 

However, CAC does not support replacing one climate-wrecking fossil fuel with another. This makes no sense. Duke is already almost exclusively reliant on fossil fuels: This proposal does nothing to change this sad reality by continuing Duke’s expensive overreliance on fossil fuels.

Replacing coal with "natural" gas is damaging for the climate, our environment, and our health. Shockingly, the large new gas units at Cayuga could generate even more climate pollution than the current coal-fired power plants because it is much larger and could run more frequently than the current units. The new gas units will also produce significant amounts of other types of harmful air pollution, including carbon monoxide, particulate matter, and volatile organic compound (VOC) emissions.

Increasing investments in energy efficiency and replacing the Cayuga coal units with solar, wind, and battery storage would help save customers money and benefit our air, water, and climate. Unlike fossil fuels, renewables and efficiency do not require fuel to operate, saving customers money for fuel costs. It also reduces a big affordability risk to households, as gas fuel prices are notoriously volatile. 

Indiana State Legislators Enabled This Rate Hike

Thanks to the passage of HEA1421 during the 2023 session of the state legislature, Duke is asking regulators for permission to start charging customers for the project in 2026, even though the two gas units would not be operating - at the earliest - until September 2029 and May 2030.

This request relies upon Construction Work in Progress (CWIP), which has been granted to utilites by state legislators in many different pieces of legislation over the years. CWIP allows utilities to charge customers for power plants during construction, before they produce any energy, and even if they never produce any energy.

CWIP is truly a bad deal for utility customers. It shifts construction risks away from utilities and their shareholders and onto the backs of captive customers. With CWIP, utilities have no incentive to keep costs low because they can pass costs directly onto customers. Duke Energy’s own Edwardsport Coal Gasification plant, which went $1.5 billion over budget and ended up costing $3.5 billion, is a classic example of the dangers of CWIP for utility customers. 

Because of HEA1421, Duke is allowed to ask the IURC for permission to charge customers for this proposal using a new tracker it has named the "Generation Cost Adjustment," or GCA. Duke wants to add this new tracker to monthly utility bills beginning in April 2026, years before the units will produce any electricity.