Duke can charge ratepayers for time construction delayed on Edwardsport plant

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The Indiana Court of Appeals has affirmed grant of Duke Energy Indiana’s request to include the amount spent during an 80-day delay in construction of the coal gasification plant in Edwardsport in a rate adjustment rider. Several parties intervened, claiming construction delays attributable to Duke should not be chargeable to ratepayers.

Citizens Action Coalition of Indiana, Save the Valley Inc., Sierra Club Inc. and Valley Watch Inc. appealed the Indiana Utility Regulatory Commission’s order approving Duke’s request to include power plant construction costs incurred April 1, 2012 – Sept. 30, 2012. The costs are included in a rate adjustment rider through implementation of a settlement agreement between Duke, the Office of the Utility Consumer Counselor and other entities over the total cost of the Edwardsport plant.

It was first estimated to cost $1.985 billion – in which construction and operating costs are recoverable from ratepayers – but the costs soared to $2.35 billion. The settlement agreement put a hard cap of $2.595 billion for construction costs to be included in rates over a 30-year period.

The plant, which began commercial operations in 2013, ultimately had an approved cost of $2.88 billion.

The interveners argued in Citizens Action Coalition of Indiana, Inc., Save the Valley, Inc., Sierra Club, and Valley Watch, Inc. v. Duke Energy Indiana, Inc., Indiana Office of Utility Consumer Counselor, et al., 93A02-1310-EX-835, that the commission applied an incorrect statutory standard that placed an undue burden on them when it approved the total of requested construction-related financing costs, despite the 80-day delay in construction.

“Our examination of the plain language leads us to agree with Duke that 8-1-8.8-12 concerns the initial application for financial incentives. We are not persuaded that, once a utility has demonstrated its eligibility for clean energy financial incentives, the Commission is obliged to go beyond a reasonableness or prudence review to conduct a line item review to ascertain ‘substantial documentation,’” Judge L. Mark Bailey wrote.  

“Interveners insist that this Court need not afford the Commission a high level of deference as to this matter. In other words, Interveners ask that we reweigh the evidence, find credible the testimony that Duke simply should not have let the delay happen, and order a reduction in the amount of construction costs allowed. This we cannot do. The allowance of costs is inherent in the ratemaking process and we accord deference to the Commission. The Commission did not act contrary to law when it found the ‘technical problems associated with human errors, equipment failures, or a combination of the two ... within the control of the Company or its contractors” did not preclude Duke’s recovery of its costs,’” he wrote.

The interveners also claimed the commission disregarded relevant caselaw by approving capitalized financing costs that allowed a return on capital contributed from ratepayers attributable to deferred taxes. But the Court of Appeals again affirmed the commission’s decision, pointing out that this issue has already been litigated.

“Ultimately, the Commission is charged with the independent oversight of ratemaking decisions. The Commission is in the best position to determine a proper rate of return on capital from utility investors, and we defer to their expertise where appropriate. Interveners were given a full and fair opportunity, in the context of the settlement proceedings and appeal, to demonstrate that deference would not be warranted in these circumstances because an improper mathematical computation allowed a return on customer investment. Having fully litigated the propriety of the AFUDC calculation in the prior appeal, Interveners are not entitled to a second bite at the apple,” Bailey wrote.



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  1. Especially I would like to see all the republican voting patriotic good ole boys to stop and understand that the wars they have been volunteering for all along (especially the past decade at least) have not been for God & Jesus etc no far from it unless you think George Washington's face on the US dollar is god (and we know many do). When I saw the movie about Chris Kyle, I thought wow how many Hoosiers are just like this guy, out there taking orders to do the nasty on the designated bad guys, sometimes bleeding and dying, sometimes just serving and coming home to defend a system that really just views them as reliable cannon fodder. Maybe if the Christians of the red states would stop volunteering for the imperial legions and begin collecting welfare instead of working their butts off, there would be a change in attitude from the haughty professorial overlords that tell us when democracy is allowed and when it isn't. To come home from guarding the borders of the sandbox just to hear if they want the government to protect this country's borders then they are racists and bigots. Well maybe the professorial overlords should gird their own loins for war and fight their own battles in the sandbox. We can see what kind of system this really is from lawsuits like this and we can understand who it really serves. NOT US.... I mean what are all you Hoosiers waving the flag for, the right of the president to start wars of aggression to benefit the Saudis, the right of gay marriage, the right for illegal immigrants to invade our country, and the right of the ACLU to sue over displays of Baby Jesus? The right of the 1 percenters to get richer, the right of zombie banks to use taxpayer money to stay out of bankruptcy? The right of Congress to start a pissing match that could end in WWIII in Ukraine? None of that crud benefits us. We should be like the Amish. You don't have to go far from this farcical lawsuit to find the wise ones, they're in the buggies in the streets not far away....

  2. Moreover, we all know that the well heeled ACLU has a litigation strategy of outspending their adversaries. And, with the help of the legal system well trained in secularism, on top of the genuinely and admittedly secular 1st amendment, they have the strategic high ground. Maybe Christians should begin like the Amish to withdraw their services from the state and the public and become themselves a "people who shall dwell alone" and foster their own kind and let the other individuals and money interests fight it out endlessly in court. I mean, if "the people" don't see how little the state serves their interests, putting Mammon first at nearly every turn, then maybe it is time they wake up and smell the coffee. Maybe all the displays of religiosity by American poohbahs on down the decades have been a mask of piety that concealed their own materialistic inclinations. I know a lot of patriotic Christians don't like that notion but I entertain it more and more all the time.

  3. If I were a judge (and I am not just a humble citizen) I would be inclined to make a finding that there was no real controversy and dismiss them. Do we allow a lawsuit every time someone's feelings are hurt now? It's preposterous. The 1st amendment has become a sword in the hands of those who actually want to suppress religious liberty according to their own backers' conception of how it will serve their own private interests. The state has a duty of impartiality to all citizens to spend its judicial resources wisely and flush these idiotic suits over Nativity Scenes down the toilet where they belong... however as Christians we should welcome them as they are the very sort of persecution that separates the sheep from the wolves.

  4. What about the single mothers trying to protect their children from mentally abusive grandparents who hide who they truly are behind mounds and years of medication and have mentally abused their own children to the point of one being in jail and the other was on drugs. What about trying to keep those children from being subjected to the same abuse they were as a child? I can understand in the instance about the parent losing their right and the grandparent having raised the child previously! But not all circumstances grant this being OKAY! some of us parents are trying to protect our children and yes it is our God given right to make those decisions for our children as adults!! This is not just black and white and I will fight every ounce of this to get denied

  5. Mr Smith the theory of Christian persecution in Indiana has been run by the Indiana Supreme Court and soundly rejected there is no such thing according to those who rule over us. it is a thought crime to think otherwise.