Duke Energy’s Clean Coal Plant Uses More Energy Than It Produces

Duke EdwardsportNLPC has detailed extensively the wastefulness and folly of spending billions of taxpayer and consumer dollars to subsidize wind energy, solar energy and electric vehicles, all in the name of fighting climate change.

But the complicated, uneconomical boondoggle that Duke Energy built in Edwardsport, Ind. so as to burn coal gas rather than coal – and thus produce less carbon dioxide than a traditional coal plant – may be the dumbest idea to fight imaginary global warming to date. If you swallow the alarmists’ premise and “solutions,” the plant so far is a joke, as recent evidence shows it is using more energy than it produces.

Edwardsport was supposed to cost $1.9 billion but that estimate was about $1.6 billion short. The project has hacked and wheezed since 2006 under evidence of cronyism, corruption, conflicts of interest, cost overruns, delays, waste, and mismanagement, but at least it became operational in June – for six days. Then it broke down, and intermittently juiced the grid for the remainder of 2013. Duke was only able to extract 37 percent of Edwardsport’s maximum capacity during the period, according to the Indianapolis Star. Hoosier State customers are paying up to 16 percent more for the privilege – a rate hike pretty much cemented into their bills last week by a state Court of Appeals decision.

Technology is supposed to improve over time, apparently except in the case of electric vehicle batteries and Southwest Indiana power plants. As the Indianapolis Business Journal reported, in an extremely cold January, the art-of-the-state coal gasifier eked out only four percent of its capacity.

“Edwardsport generated 19,644 megawatt hours of electricity,” the Journal reported, “enough to power about 20,000 homes, in one of the most frigid months on record, according to a Feb. 28 filing with the Indiana Utility Regulatory Commission. The new plant, at its maximum capacity, could have generated almost 460,000 megawatt hours in January.”

And now, in the latest battle Edwardsport has taken against global warming, the plant was found to have used more energy from September to November than it produced. The Business Journal reported earlier this month that Duke is trying to recover $1.5 million in fuel costs related to the plant, which is being challenged by Indiana’s Office of the Utility Consumer Counselor, which is supposed to advocate on behalf of utility customers.

“We’ve never seen an episode of negative generation as large as this,” said Anthony Swinger, a spokesman for the counselor’s office.

With all the failures and shortcomings, groups representing consumers and environmentalists have asked the Indiana Utility Regulatory Commission for an investigation. Duke argued that it already reports regularly on the plant’s operations to the IURC and therefore an investigation is unnecessary.

A settlement has limited the costs of the build-up of the plant for customers to $2.6 billion, while Duke’s shareholders are to absorb $900 million. But now that Edwardsport is officially “online,” critics fear that repairs and maintenance that should be charged against the original design of the plant, will instead be added as new costs for customers under routine ongoing upkeep. And with the Court of Appeals decision, the IURC does not appear willing to revisit the settlement over division of costs.

“The commission gave Duke a blank check for a science project,” said Kerwin Olson, executive director of the Citizens Action Coalition, to industry publication SNL Energy.

Duke might not be feeling the pressure from the activist groups as much had the company not engendered distrust throughout the development and construction process. As costs skyrocketed, CEO Jim Rogers sought out help from then-Gov. Mitch Daniels in search of some kind of intervention between Duke and the contractors it felt should absorb some costs, General Electric and Bechtel. According to documents, Rogers also pursued financial support in Washington from federal programs intended for “clean coal” technology development. And two Duke officials were fired after the successful recruitment of an Indiana Utility Regulatory Commission counsel to join Duke, while the lawyer still oversaw cases that concerned the utility. That attorney, Scott Storms, was reprimanded last month by the Indiana Supreme Court for his misconduct in the scandal.

In early 2012 the Office of Utility Consumer Counselor was sharply critical of Duke’s management of Edwardsport. According to The Star, the advocate agency believed Edwardsport illustrated “a compelling case of a company that, through arrogance or incompetence, has unnecessarily cost ratepayers millions of dollars and has set back the public’s trust in our regulatory process.” OUCC characterized Duke’s management of the project as “woefully unqualified” and its methods led to “unnecessarily complicated” engineering and construction costs.

“Duke has not demonstrated any budgetary constraints on this project,” testified Barbara A. Smith, director of OUCC’s resource planning and communications division. “There appears to be a lack of responsibility or accountability on the part of those causing these multimillion-dollar cost overruns.”

Nevertheless the IURC has determined that Edwardsport is a necessity to meet Indiana’s electricity demand in the future, and customers will pay for most of it. Duke has said it will take 15 months to get it to full operation. With energy intake vs. output in an upside-down situation after six months, how realistic can that be?

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.