Appeals court: Indiana regulators failed in review of Edwardsport fee transfer sought by Duke

The Indiana Court of Appeals ruled Monday that state utility regulators wrongly approved $61 million in ratepayer fees for the Edwardsport coal gasification plant.

Duke Energy is seeking the money to cover construction costs for the plant. But Appeals Court Judge James Kirsch wrote in Monday's opinion that members of the Indiana Utility Regulatory Commission should have better analyzed arguments from Duke Energy and plant opponents before approving the fee increase.

The commissioners mostly repeated the testimony of Duke's key witness, Kirsch wrote, adding that he agreed with plant opponents that the commission's analysis was "insufficient" to support the $61 million transfer to ratepayers.

Duke officials have said a three-month delay led to increased project costs. But opponents, led by the Citizens Action Coalition, have argued that regulators have been "rubber-stamping" fees and a rate hike sought by Charlotte, North Carolina-based Duke.

Kerwin Olson, executive director of Citizens Action Coalition of Indiana, called the ruling a temporary win for opponents of the plant.

"It kicks it back to the commission saying, 'Do your job,'" Olson said.

A commission spokeswoman declined comment, saying it was reconsidering the case.

Duke spokeswoman Angeline Protogere noted the court did not overturn the commission's decision and only returned it to the agency for reconsideration.

"Importantly, it does not affect a previous decision by the court that upheld a settlement agreement with key consumer groups that shares the costs of the plant between shareholders and customers," Protogere said.

The case is one of many surrounding the Edwardsport plant. The $3.5 billion plant — which converts coal to synthetic natural gas — has been plagued by cost overruns and intensive legal fighting.

The commission previously limited the amount Duke could charge ratepayers to $2.6 billion, requiring the company to pay for $900 million in cost overruns itself.