Duke: Construction costs of clean coal gasification plant increased $174mn

Duke Energy Indiana, a unit of Duke Energy (NYSE: DUK), said in filings with the U.S. Securities and Exchange Commission (SEC) that it expects to spend $3.154 billion for the 618 MW Edwardsport clean coal gasification power plant, up from estimates of $2.98 billion. The plant’s expected commercial start date was pushed back from early 2013 to mid-2013.

Duke said in the filings that lower than projected revenues from test output and delays due to more extensive testing conditions have added approximately $174 million to the previous estimate. As a result of the cost estimate, Duke expects to record a pre-tax charge to earnings of approximately $180 million in 3Q 2012, which will be treated as a special item and excluded from Duke’s adjusted diluted earnings per share.

Duke entered into a settlement agreement with the Office of Utility Consumer Counselor, the Duke Energy Indiana Industrial Group and Nucor Steel – Indiana to cap costs reflected in customer rates at $2.595 billion. As part of the agreement, Duke is allowed to recover additional AFUDC after June 30 until customer rates are revised, with such recovery decreasing to 85 percent on AFUDC accrued after November 30, 2012.

To read the filing, click here.

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