Court upholds state approval of coal gasification plant

EDWARDSPORT, INDIANA - The Indiana Court of Appeals upheld regulators' approval of Duke Energy's proposed $2.35 billion coal gasification power plant, handing a defeat to environmental groups that had opposed the project.

The southwestern Indiana plant — one of the first projects of its kind — is scheduled to go online in 2012 near the town of Edwardsport and use advanced coal-gasification technology to produce power with far fewer emissions than conventional coal-fired plants. Construction unofficially began in July.

The Sierra Club, Citizen Action Coalition of Indiana, Valley Watch and Save the Valley appealed the Indiana Utility Regulatory Commission's November 2007 approval of the project. The groups argued that the commission erred by failing to reopen proceedings to admit new evidence and questioned whether law allowed Duke to recover costs during construction, whether officials adequately considered the plant's future costs and whether state laws favoring use of Indiana coal violated the interstate commerce clause of the U.S. Constitution.

But the Court of Appeals ruled against the groups on all four issues. The court held that evidence of increased construction costs and other factors did not necessitate reopening proceedings because, in part, those factors were anticipated in the commission's order.

The court also said the commission did not err in allowing Duke to recover costs during construction. It also held that Duke and the commission had considered the potential costs that might eventually be imposed by federal greenhouse gas limits. Duke has a proposal before state utility regulators to test technology to capture and store the plant's carbon dioxide below ground.

The groups also asked the court to overturn state laws expressing a preference for Indiana coal in approving utility projects. But the court said that even if the laws were overturned, the groups would not be entitled to relief and the commission did not consider the use of Indiana coal as a factor in granting Duke's petition.

The Associated Press left phone messages seeking comment at the office of Jerome Polk, attorney for the environmental groups, and Duke Energy.

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.

The 630-megawatt 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 new plant, if built and opened by 2012, stands to be the first in the nation to use coal gasification technology on such a large scale.