Indiana OKs Duke Power Plant

As part of the order from the Indiana Utility Regulatory Commission, Duke will shut the state's oldest coal-burning plant and build a new 630-megawatt unit with so-called integrated gasification combined cycle, or IGCC, technology, which transforms coal into a synthetic gas before running it through generation turbines. The process allows carbon dioxide, the main global warming gas, to be captured before it's released into the atmosphere.

Duke, based in Charlotte, N.C., owns the electric utility that serves the southern half of Indiana.

Duke's ratepayers in Indiana will see an overall rate increase of 16 percent to pay for the new plant. The commission, however, rejected a request from Duke to earn a higher return on equity of 12 percent of the plant. The return will be 10.5 percent instead.

"The commission felt there were already enough incentives," said spokeswoman Mary Beth Fisher.