July 29, 2011-by Chris O’Malley in the Indiana Business Journal

Duke Energy's mismanagement of their Edwardsport "new" coal plant has caused costs to rise to levels 2.5 times what they projected when they gathered political support for their project from 2004 to 2007. Among those enlisted for that support were Governor Mitch Daniels as well as David Lott Hardy, then chair of the Indiana Utility Regulatory Commission. Daniels even went so far as to write a letter to the USEPA seeking favor for Duke to get an exemption from federal hazardous waste rules so Duke could by pass treating their hazardous water waste and instead inject it deep underground. EPA denied the Governor's request and Duke had to pony up an extra $100 million to build a waste water treatment plant to handle the waste. That expense was one the the things that caused the cost of the plant to rise. Photo © 2011 John Blair
Regulatory filings alleging Duke Energy Corp. grossly mismanaged construction of its Edwardsport plant contend the utility ignored warnings for seven months over potential problems with federal regulators if it disposed of plant water deep underground.

David Lott Hardy declares his support for Duke's then proposed plant at the "Energy Summit of Southwest Indiana" the day after he presided over a public hearing in Bloomington that discussed the plant's future. Photo © 2007 John Blair
Missteps in how to dispose of “grey water” produced in the coal-gasification process have been cited by consumer groups as among major reasons for $1 billion in cost overruns at the plant. Nearing completion, the facility is now estimated to cost more than $2.8 billion.
Earlier this month, the Indiana Office of Utility Consumer Counselor alleged that Duke bungled the water disposal system to the tune of $100 million in cost overruns.
A report filed in recent weeks by OUCC’s consultant, Houston-based Accumyn Consulting, contends that Duke embraced deep-well injection disposal despite problems with the technology at another of its projects.
Duke officials in 2006 assumed that the grey water produced in the production process would be non-hazardous, according to Accumyn. A year later, Duke’s own engineers expressed “serious concerns” and recommended that partner General Electric “firm up” the analysis of the water content.
Two months later, in November 2007, GE’s report indicated the water likely would have elevated concentrations of arsenic and selenium—high enough to be characterized as hazardous under federal law.

Indiana Governor, Mitch Daniels also appeared at the Energy Summit, praising the ill-fated Duke plant as the energy of the future in Indiana. He later fired Hardy in an attempt to distance himself from the cost overrun scandal that has developed during the plant's construction. Photo© 2007 John Blair
About one month after acknowledging the results, Duke received approval from the Indiana Utility Regulatory Commission to build the plant. But Duke’s management “had evidently failed to reveal important information discovered before the commission decided on approving the project,” Accumyn states in its report. Continue reading