Ind. coal-gasification plant cost reaches $2.5B

INDIANAPOLIS — Duke Energy Corp. says the cost of the coal-gasification power plant it's building in southwestern Indiana has risen another $150 million, boosting the project's estimated price to $2.5 billion — nearly twice the original estimate.And the latest increase won't be the project's last.Charlotte, N.C.-based Duke Energy said in documents filed Tuesday with the Indiana Utility Regulatory Commission that the 630-megawatt plant's cost has gone up because its design has required more steel, piping, electric cable and other materials than originally expected."Because this is the first time this technology has been used on this scale, there was not nearly as much guidance on size and quantity as there would be for a typical project with a design that had been constructed many times," Duke Energy Indiana President Jim Stanley said in a statement.The plant is being built along White River near Edwardsport, about 15 miles northeast of Vincennes, replacing a 160-megawatt coal-fired plant that Duke operates there. The company said construction is about 28 percent complete.Unlike traditional coal-fired power plants that burn coal to produce electricity, coal gasification converts coal into a synthetic gas that's processed to remove pollutants such as mercury and sulfur. That gas is then burned in a traditional turbine power plant to produce electricity.Duke officials say the plant, slated to begin operation in 2013, stands to be the first in the nation to use coal gasification technology on such a large scale.The company expects to provide another cost revision by next March covering labor, engineering, procurement and plant startup costs. Duke spokeswoman Angeline Protogere said the utility would file for a rate adjustment to cover the increased cost then.Rate increases covering the cost of the plant are being phased in over time, and so far customers have paid about $20 million toward financing costs for the plant, Protogere said. Construction costs won't be reflected in rates until the plant is co

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