Kerwin Olson, our Executive Director, explains and simplifies the true cost issues with the Duke Edwardsport plant in a new editorial in the Kokomo Tribune.
"Duke, along with the IURC, continues to perpetuate the myth that the plant will result in just a 14.5 percent rate increase. The reality is this 14.5 percent represents only a portion of the financing costs for the project. Additional financing costs of at least $320 million, as well as the actual construction costs currently capped at $2.595 billion, are not included.
That 14.5 percent only represents the approximately $665 million in construction-work-in-progress charges, or CWIP, a tracker or extra fee tacked onto the bill of captive Duke ratepayers. How much more will monthly bills increase after the other $3 billion is factored into rates? Ask Duke or the IURC … see if you can get a straight answer."
He also explains how the recent settlement between Duke Energy and the Office of Utility Consumer Counselor (OUCC) that promised a "cost cap" for ratepayers is meaningless once the plant has been declared "in-service" (as it was on Monday, June 10, 2013):
"Duke claims its construction costs are capped at $2.595 billion, but that isn’t accurate. Duke declared the plant “in-service” on June 7, which effectively marks the end of this so-called “cost cap” from the settlement. From this date forward, ratepayers can potentially be stuck with every dollar Duke spends on the plant, and there remains a lengthy “punch-list” of items that are yet to be completed. So, the settlement effectively exposes consumers to the potential of significant costs outside of the cap, which was intended to protect them."
He ends with how the IURC has failed to protect consumers every step of the way.
"Lastly, it needs to be understood that the IURC has declined to protect consumers from a white elephant by refusing to place any operational or performance requirements on the Edwardsport plant. Despite this plant being a first-of-its-kind technology, never built or operated at this scale anywhere in the world, if it doesn’t work or operates at less than the 85 percent capacity factor that Duke opined the plant will achieve, Duke ratepayers are stuck with the bill, no questions asked. As long as the plant runs for even a minute, Duke gets the full amount."
These are the issues of immediate importance we are working on right now.