FIRST MONTHS OF OPERATION ROCKY FOR INDIANA IGCC PLANT

Tamar Hallerman
GHG Monitor
8/23/13

Duke Energy has faced a rocky start as it ramps up operations at its integrated gasification combined cycle facility in Indiana, events the utility is publicly brushing off as an expected part of operating a plant that utilizes new technology. Six days after the 618 MW Edwardsport facility came online in June, the plant was temporarily shut down due to damages to its wastewater fans, a key component of the plant’s gasifers. The Indianapolis Star reported that Duke has also experienced a host of issues at the plant related to faulty pieces of equipment and that some problems had yet to be resolved.

A company spokeswoman confirmed that the $3.5 billion Edwardsport plant was temporarily taken offline earlier this summer, but that the issues with both of the plant’s gasifiers have been “resolved.” Officials instead stressed that some early issues were expected given that the IGCC facility is utilizing newer technologies. “We expect to encounter issues in the early phase of operation. Our approach is to identify causes and revolve issues as they occur. To date, we have not identified any issue that will impact the long-term performance of the plant,” CEO Lynn Good told the electric utility’s investors during a second quarter earnings call earlier this month. Good added that she does not anticipate any long term operational issues at Edwardsport. “As we have identified issues, we have dispatched the team to do a root cause analysis and have resolved them. At this point, we do not see anything that has developed over a long-term nature,” she said.

Investors Absorbed Nearly $1B to Cover Edwardsport

The initial operational woes at Edwardsport are the latest to plague the facility, which in recent years has been at the center of swirling ethics allegations and legal and regulatory battles with consumer advocate and environmental groups. Project opponents had questioned Duke’s at times cozy relationship with regulators on the Indiana Utility Regulatory Commission and alleged that the Charlotte-based utility had improperly “concealed” and “grossly mismanaged” the facility’s cost estimates in order to gain rate recovery from regulators. Duke also faced a multitude of scheduling delays and cost overruns as it constructed the project. By the time Edwardsport came online earlier this summer, it was $1.5 billion over-budget. Duke, however, was only able to recover $2.6 billion in costs from its ratepayers under a settlement agreement with industry and state parties.