Howard Greninger
The Tribune-Star
TERRE HAUTE —
Managing energy usage with a “smart grid,” as well as completing a new 618-megawatt coal gasification power plant in Edwardsport, are some measures Duke Energy is undertaking to meet future power demands, said Michael W. Reed, president of Indiana Operations.
Reed visited Terre Haute on Friday. He assumed his new role June 14. Reed previously had served as commissioner of the Indiana Department of Transportation since February 2009. Prior to that, he served as executive director of the Indiana Utility Regulatory Commission from 2006 to 2009.
He also worked more than 30 years in telecommunications with GTE and later Verizon. He had served as senior state executive for Indiana, Texas and Kentucky operations.
Duke Energy by 2050 must replace all of its power generating plants, or “fleet”, throughout its system in North Carolina, South Carolina, Kentucky, Ohio and Indiana.
“Not only Duke Energy, but every electric company in Indiana, about half of their coal-powered fleet is 40 to 50 years old or older,” Reed said. “The functional life of those plants is typically 40 years. What that means is we are kind of on the front edge — and taking a few barbs for it — but every company in the state is going to have to modernize their fleet.
“The more we can do it efficiently, at less cost from an operating standpoint, and customers have tools to manage their energy efficiency, that will drive down the need for us to replace some of these” power plants, Reed said.
One example of an aging facility is Duke Energy’s Wabash River Generating Station near West Terre Haute. The plant first came online in 1953. Now, nearly two-fifths of the plant is shut down.
Cinergy Corp., bought out by Duke Energy in 2006, was ordered by U.S. District Judge Larry J. McKinney in May 2009 to shut down three power generating units at the Wabash River power plant for violations of the federal Clean Air Act.
A 1999 lawsuit found Cinergy guilty of modifying the plant from 1989 to 1992 without installing the best-available pollution control technology. The judge shut down the units, citing increased sulfur dioxide emissions.
Duke Energy shut down the units, as required, by Sept. 30, 2009.
Those three units accounted for 39 percent of the power plant’s capacity, said Lew Middleton, Duke Energy spokesman.
“There are two units, 4 and 6, that are still online and still serving customers with power. So, 61 percent of the plant’s capacity is still being used to generate electricity,” Middleton said.
Middleton said Duke Energy does not have current plans to bring those closed units back into power generation. “It is precarious,” Middleton said of the future of the plant.
“It is still up in the air. We did file an appeal of the court’s decision to shut those three units down and that appeal is still pending,” Middleton said.
Reed said retro-fitting all of Duke Energy power plants like the Wabash River Generating Station would be expensive “and becomes somewhat cost-prohibitive.”
The alternative is also costly. The “barbs” to Duke have come from rising costs to its Edwardsport plant. Originally estimated to cost $2.35 billion, the plant now is projected to cost $2.88 billion, Reed said. Duke Energy projects a 19-percent increase to its customer power rates. The rate increase is based on its 2009 electrical rate, with increases phased in through 2013.
“We are working on containing the cost and getting this plant built. This is a plant type that at this scope and scale has never, ever been tried before anywhere in the world,” Reed said. “The technology has been around for a number of years, but at this scope and scale, never has been tried.
“We are finding things we just didn’t expect and that is an unfortunate byproduct. The good news is when this comes online in the second or third quarter of 2012, we will have the most environmentally efficient coal-burning plant anywhere in the world,” Reed said.
The plant will have more than 40 percent less carbon dioxide emitted through the coal gasification process, he said. “It is good for Indiana, as it will provide for about 300 jobs, with about 120 at our plant and about 170 coal mining jobs,” he said.
“It will use Indiana dirty, high-sulfur coal at an efficiency factor environmentally that has never, ever been accomplished,” Reed said.
And that coal has a long-term supply. In the Indiana/Illinois coal basin, there remains a 120-year supply of known coal yet to be mined, Reed said.
The Edwardsport power plant currently has about 2,500 construction workers on site.
Next, Duke Energy plans to start a pilot project in Hamilton and Boone counties at a cost of $22 million for a “smart grid” system. Customers, or Duke Energy, can use a “smart meter” to shut down power to appliances, such as refrigerators, for one to two hours a day during peak power usage. It also gives Duke Energy immediate digital information about how energy is used after it goes through the meter, as well as more control of energy use.
Duke had hoped to install 800,000 smart meters over six years in Indiana. However, the Indiana Utility Regulatory Commission shot down that $450 million proposal, instead opting for the scaled-down pilot program that installs the meters in one year.
Duke hoes to demonstrate the smart-grid should be implemented statewide.
Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.
