The Indiana Court of Appeals sided with consumer advocates Tuesday, reversing a decision by the state’s utility regulator that allowed Duke Energy Indiana to recover millions of dollars from Hoosiers for cleaning up toxic coal ash at its power plants in the state.
A three-judge panel ruled in a unanimous opinion that the Indiana Utility Regulatory Commission incorrectly allowed Duke Energy to collect $62 million for the work from Hoosier ratepayers.
“This is a big win,” said Kerwin Olson, Executive Director of Citizens Action Coalition.
The coalition argued IURC misapplied a 2023 state law when approving Duke’s rate hike request to pay for coal ash cleanup dating back to 2019, which resulted in the case going to the Court of Appeals.
“It’s quite simply, from our perspective, retroactive rate making, which is not allowed,” said Olson. “The commission should have known better, and now we’re pretty happy with this (decision).”
The court decision focused on cleanup costs incurred prior to 2023, and Duke may still be able to recoup some of the costs going forward.
IURC spokesperson Luke Wilson said the commission could not comment since the court’s decision is within an appeal window. Duke Energy Indiana spokeswoman Angeline Protogere said the utility is still reviewing the court’s opinion.
EPA mandates coal ash cleanup
The roots of the rate hike go back to 2015 when the U.S. Environmental Protection Agency wrote new rules for utilities, such as Duke and others across the country, on how to properly treat and dispose of coal ash — a toxic product of burning coal in power plants.
As Duke took on those costs, it applied with state regulators in 2019 to increase its rates for Indiana customers to recover the price of that cleanup, the appellate opinion says. The IURC approved that request, but it was overturned when the Indiana Supreme Court ruled the state does not allow retroactive ratemaking.
Then in 2023, Indiana lawmakers passed a bill allowing utilities to incur costs related to federal mandates and then ask the IURC to allow them to recoup those costs from consumers. The bill originally did not provide this benefit to utilities but was amended to allow them to ask regulators to pass along the costs.
Duke filed a new application with IURC months after the 2023 bill was signed into law, seeking to recover previous coal ash cleanup costs. When CAC pushed back, the recent appeal ensued.
Duke can now try and appeal the appellate decision to the Indiana Supreme Court, or let IURC reconsider or dismiss the its application.
Court agrees nonprofit has standing
The appellate court also agreed Citizens Action Coalition had standing in the case, meaning CAC could sue on behalf of its members who are Duke customers. The utility and IURC have previously argued CAC did not have that right.
“Duke challenged our standing in the case and the court rejected those arguments soundly,” Olson said. “We’ve seen more and more challenges on standing, so that (decision) was good.”
IndyStar’s environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.
Karl Schneider is an IndyStar environment reporter. You can reach him at karl.schneider@indystar.com. Follow him on BlueSky @karlstartswithk.bsky.social or X @karlstartswithk.
This article originally appeared on Indianapolis Star: ‘Big win’ for consumer group and Duke customers in fight over old coal ash cleanup costs
Reporting by Karl Schneider, Indianapolis Star / Indianapolis Star
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