Duke Energy settlement unsettles utility’s fiercest foe- Dan Carptenter Indy Star Columnist

May 6, 2012-Column by Dan Carpenter in the Indianapolis Star News

They were a voice in the wilderness when they took on mighty Duke Energy Corp. and its $3 billion Edwardsport coal gasification plant five years ago.

Now that Duke has been brought to heel over cost overruns it sought to pass along to customers, the Citizens Action Coalition and other consumer and environmental groups who oppose the plant’s very existence feel not so much vindicated as left out in the cold.

They call it a “heist” that Duke would absorb a minimum of $700 million of excess cost for a project they deem unneeded and experimental to begin with, and they accuse those who made the deal of lowballing the potential hit to customers and pretending skulduggery didn’t happen.

What will $3.3 billion buy? Just a bunch of Chinese steel and experimental technology for which Dupe Energy customers were forced by the state of Indiana to assume the risk for. Pictured is the Duke Energy Edwardsport power plant which could turn out to be a very expensive "lemon." Photo © 2012 John Blair

“It is unconscionable,” says the CAC’s executive director, Kerwin Olson, “for the OUCC and the industrials to allow these ethical issues to just go away.”

Indiana’s Office of Utility Consumer Counselor, headed by David Stippler, and Duke’s large industrial customers, represented by attorneys Tim Stewart and Jack Wickes, do not agree that the settlement they reached with the utility is a bad deal for consumers or a whitewashing of Duke’s bad behavior. They also insist that the CAC, which was a party to the Duke case, was not shut out of negotiations even if the settlement came as a surprise to the advocacy group.

The Indiana Utility Regulatory Commission has final say on the agreement — unless the courts get involved.

What no one can dispute is that Edwardsport would have sailed through in a closed world of concealment, cronyism and corruption had it not been for the dogged agitation of the CAC and allied groups, as well as the investigative work of The Indianapolis Star.

Among the fallout: a felony indictment of David Lott Hardy, deposed chairman of the IURC; and firings and resignations of various bigwigs at the IURC and Duke.

How, the protesters ask, can the consumer counselor set all that aside after he read the riot act to Duke just months ago?

Stippler responds that he got the best deal for customers out of a formidable adversary in a high-risk setting.

“Others can draw their own conclusions,” he says. “My focus is on the ratepayers. When we see the egregious sums of money now being shouldered by Duke shareholders, that in itself sends a very clear message.”

With the cap on costs that the settlement includes, Duke customers could save more than $2 billion more than 30 years, the lawyers for the industrial users add. They reject the CAC’s contention that hundreds of millions in so-called Construction Work in Progress dollars could have been recouped from Duke as well.

“This is very material to Duke,” Wickes argues. “Had we not made our arguments of concealment, we would not have seen this conclusion.”

The public, says the CAC, deserves a better conclusion.

“This is about undue influence of Duke that Chairman Hardy faces felony counts on,” Olson declares. “That’s why it’s so shocking to us that the other settling parties were so eager to dispose of it and shove it under the rug.”

Meanwhile, Edwardsport is nearly finished. The state hopes it pays off. The CAC expects to continue playing Cassandra, as it has since five years and $3 billion ago.

Carpenter is Star op-ed columnist. Contact him at (317) 444-6172 or at dan.carpenter@indystar.com.

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