Indiana regulators force Hoosiers to bail out Duke's coal plants

INDIANAPOLIS — State regulators charged with looking out for the best interests of Indiana’s utility customers failed today in that duty by allowing Duke Energy Indiana to keep forcing Hoosiers to pay millions of dollars every month to run their coal-burning power plants, Edwardsport and Gibson, even when cheaper energy is available.

Duke operates its coal plants without regard to the interests of its customers. Duke burns coal at Edwardsport — the most expensive power plant in Indiana, one of the costliest to operate in the entire country — even though nearly every day it would be cheaper to buy electricity on the grid. Similarly, at its massive Gibson Super Polluter coal-burning plant, Duke burns coal essentially just to get rid of it, losing money when the plant operates, because Duke entered into high-cost coal supply contracts that aren’t in the interest of Duke customers. 

The Indiana Utility Regulatory Commission (IURC) has ruled that Duke’s decision to knowingly run its coal units at a loss (a practice called “uneconomic self-scheduling”) is acceptable, despite $40 million in excess costs Duke incurred during a nine-month period in 2019-2020.  

Sierra Club last year intervened in Duke Energy's quarterly fuel costs docket to try to stop this harmful practice of self-scheduling coal units, but the IURC has decided to let  Duke keep burning coal at Edwardsport and Gibson, even though Duke’s own analysis showed customers would have saved money if the company didn’t commit its coal units as must-run (a utility decision to operate a plant no matter the economics).  

Nearly every coal plant in Indiana operated less in 2020 than in 2019. But defying economic logic, Edwardsport ran more frequently than any other coal-fired plant in the state except one (Vectren’s Warrick plant that serves a sole industrial customer), even though Edwardsport is much more expensive to operate than any other plant in the state.  

Self-scheduling these coal plants is not just bad economics—it’s a bailout for Duke’s outdated coal plants. As long as the IURC allows Duke to pass on these losses to Indiana customers, Duke has no motivation to stop burning money, as well as coal, at Edwardsport and Gibson.

In response, Wendy Bredhold, senior representative for the Sierra Club’s Beyond Coal campaign in Indiana, issued the following statement:

“The IURC ignored the facts and the experts, and failed to protect customers from being forced to bail out Duke’s uneconomic coal plants. Duke is the dirtiest utility in Indiana, and their massive stockpiles of coal grow month by month because of the bad deals they make with coal companies, which customers are forced to subsidize. It’s a shocking dereliction of duty that the IURC has bought Duke’s arguments wholesale and endorsed this unfair burden on Hoosier families and businesses.”