The cost to build Duke’s coal-fired plant in Edwardsport, Indiana was already about a billion dollars over original estimates.
Now the testing of new technology to burn coal more cleanly at the plant is taking longer than expected and adding $180 million to the cost.
Duke spokeswoman Angeline Protogere says this should be the last expensive delay for the Edwardsport plant.
“We believe this is a realistic cost for the project,” says Protogere.
Shareholders better hope she’s right, since Duke has agreed to limit the cost overruns it will make rate payers cover. Meaning shareholders will pay. And they’ll also be on the hook for an extra $100 million related to a damaged nuclear plant in Florida that belonged to Progress Energy.
Duke Energy has until the end of this year to start repairing the severely damaged plant or reimburse Florida customers for the lost power. Duke now says it needs more time to figure out if it’s worth spending the billions of dollars repairs could cost.
These two bits of bad news for Duke shareholders come on top of the company’s decision to postpone a rate hike request in North Carolina until at least next February.
“Because it involves such a significant work load when you have two rate cases filed back to back,” says Duke Energy spokesman Mike Hughes, noting the request Duke already has underway for an 11 percent rate increase on customers of its Progress Energy subsidiary in North Carolina.
Delaying the rate increase for Duke customers may also give the company time to see another dark shadow resolved: Regulators continue to investigate the surprise CEO switch that caused much consternation when Duke and Progress completed their merger over the summer.
So long as these regulatory troubles hang over Duke Energy stock, analysts say the company’s stock will continue to trade for less than it’s worth.
