July 12, 2011-An Editorial by the Indianapolis Star
Citizens have a right to expect that the monopolies from whom they must buy their electricity are being watched over by the government bodies created to keep costs in check.
In the case of Duke Energy Corp. and the exploding expenses of its Edwardsport coal-gasification plant, those customers are lucky someone was watching the watchers.
An about-face by the utility consumer counselor could force Duke’s shareholders to pay $530 million in cost overruns that Duke wants to dump on ratepayers.
That sum and other cost increases for the $2.9 billion project will be scrutinized by the Indiana Utility Regulatory Commission as it pursues an embarrassing do-over.
The Office of Utility Consumer Counselor, the people’s arm of the regulatory process, signed off in September on Duke’s request to pass the $530 million along to ratepayers.
Outsiders — consumer advocacy groups and The Indianapolis Star — persisted in following an odor. In October, The Star began a series of revelations of close relationships between Duke executives and minions of the utility regulatory commission.
The hundreds of emails The Star obtained led to job losses by top-level men on both sides. Scott Storms was found in violation of state ethics laws after it was determined he had negotiated for a job with Duke while he worked on its requests as general counsel to the utility commission.
Duke fired Storms after the scandal broke; but that consequence and other fallout from this episode did nothing to allay concerns about the historical revolving door of employment and appointment between state regulatory agencies and the companies they’re supposed to regulate.
Critics of the Edwardsport plant are delighted to see the weight of the consumer counselor’s office brought to bear at long last. But it is distressingly late. If the commission does find Duke guilty of fraud or mismanagement, it will have to decide what to do about a huge project that is 90 percent finished. The public can only wonder how much smaller the problem would have been, had the system worked in the first place.