Summary
Duke Energy Indiana, Inc., a subsidiary of Duke Energy Corporation, has reached a settlement with key stakeholders regarding operating costs at its Edwardsport clean coal gasification plant. This agreement addresses previously deferred operating and maintenance expenses, proposing an $85 million reduction and a $5 million shareholder contribution for attorney fees and trusts. The remaining deferred costs incurred before a 2016 cap will be recovered from customers over eight years, maintaining the June 7, 2013 commercial in-service date for accounting and ratemaking purposes. This settlement also introduces caps on ongoing capital expenditures and recoverable annual plant operating and maintenance costs through 2017. Future regulatory filings for cost and rate updates will be annual instead of semi-annual. Duke Energy expects to recognize a pre-tax charge of approximately $90 million in Q3 2015, which will be treated as a special item and excluded from adjusted diluted earnings per share. The settlement is contingent on approval by the Indiana Utility Regulatory Commission (IURC), with a decision anticipated in the first half of 2016.
Key Highlights
- 1Duke Energy Indiana (DEI) settled with consumer advocates and industrial groups on Edwardsport clean coal plant operating costs.
- 2The settlement proposes an $85 million reduction in previously deferred operating and maintenance (O&M) expenses.
- 3Shareholders will fund $5 million for attorney fees, trusts, and programs.
- 4Remaining deferred costs incurred before 2016 will be recovered from customers over eight years.
- 5The commercial in-service date for the Edwardsport plant remains June 7, 2013, for accounting and ratemaking.
- 6Caps are introduced on ongoing capital expenditures and annual O&M costs through 2017, with specific amounts detailed for 2016 and 2017.
- 7DEI anticipates a pre-tax charge of approximately $90 million in Q3 2015, excluded from adjusted EPS.