Ind. Coal Plant Foes Gird Themselves

Environmental and consumer groups contend the plant could result in up to a 20 percent rate increase for Duke customers and won't live up to its "clean coal" billing.

Dave Menzer, a member of the Indianapolis-based consumer watchdog group Citizens Action Coalition, said he's expecting a large turnout for Wednesday's hearing at Bloomington City Hall conducted by the Indiana Utility Regulatory Commission.

"It's really important that the public come out and voice its opposition -- that's what gets our policymakers' attention," said Menzer, the group's utility campaign coordinator. "It's really a risky, expensive proposition, and it's not clean energy."

Duke's planned 630-megwatt plant would replace an aging traditional coal-fired plant at Edwardsport about 50 miles southwest of Bloomington that generates about 130 megawatts.

It would use new technologies to turn high-sulfur coal extracted from the region's mines into a gas and also generate electric power using combustion and steam turbines.

The gasification process, which involves crushing coal and adding water to it to form a slurry that's then heated to extract the gas, includes equipment to remove nitrogen oxide and sulfur dioxide as well as mercury emissions.

Duke Energy spokeswoman Angeline Protogere said the utility, which serves more than 700,000 customers in central and southern Indiana, examined renewable energy sources but found that a coal gasification plant would best meet its future energy needs.

"This was the best option and the most economic option. There are no cheap energy options," she said.

Menzer said the company should have investigated renewable energy sources, particularly wind power, that would be less costly and release little or no pollution but still meet future energy demands. The plant's opponents said it will release significantly more carbon dioxide, a greenhouse gas, than the older plant.

Once Duke Energy passes along the project's costs to its customers, Menzer said, they can expect to see an eventual rate increase of between 15 percent and 20 percent.

Protogere said the plant's cost is projected to be about $1.98 billion. She said the utility expects that the project to boost its rates about 16 percent, pending regulators' approval, through phased-in increases that would peak around 2012.

She said the rate increase could rise above 16 percent, however, if the utility installs equipment to remove about 20 percent of the plant's carbon dioxide emissions and is allowed to pass those costs onto its customers.

Protogere said Duke hopes to receive commission approval for the plant -- and obtain an air permit from the Indiana Department of Environmental Management for the project -- by year's end.

The coal gasification plant was originally proposed as a joint venture between Duke Energy and Vectren Corp., but Vectren announced Aug. 1 that it was dropping out of the project.