Groups look to derail Edwardsport plant

Duke Energy Edwardsport ethics probe targets a deposition ordered by the Indiana Utility Regulatory Commission into alleged undue influence, coal gasification cost overruns, and regulator ties, as Citizens Action Coalition and Sierra Club challenge approvals.

In private, James L. Turner, the second-highest-paid executive at Duke Energy Corp., was rarely at a loss to express himself, exchanging frequent e-mails with Indiana regulators about cars, vacations, alcohol and personnel decisions.

Now several citizens and environmental groups are hoping that Turner, who is leaving the company under an ethics cloud, will keep talking.

Backed by a state order, they plan to grill him early next year about his role in the company's decision to hire away several state employees in possible violation of Indiana ethics laws. They also want to question him about the company's $2.9 billion coal-gasification plant in Edwardsport, which they call a boondoggle amid deep concerns from a counselor over the project.

The Indiana Utility Regulatory Commission signed an order that compels Turner to appear at a deposition in Indianapolis for questioning by the Citizens Action Coalition of Indiana, the Sierra Club, Save the Valley and Valley Watch.

The groups plan to ask Turner about “anything and everything” concerning his relationship with several state officials and Duke employees who were fired earlier this year in a growing ethics scandal, said Kerwin Olson, program manager for the Citizens Action Coalition.

“He was the go-to guy in the whole affair,” Olson said. “We want to know exactly what role he played.”

The groups want to use any information they can get from Turner to help build a case that Duke Energy used undue influence in getting the state to approve the Edwardsport plant and its cost overruns, much of which will be passed along to consumers. The groups want to halt construction at the plant, which is more than halfway completed, and have Duke foot much of the bill on the grounds that the company has concealed information and mismanaged the project.

Duke has repeatedly denied those allegations, saying it has managed the project properly and, even as rising worries surfaced in internal e-mails, let regulators know about cost and construction problems as they arose.

Originally, Turner was ordered to appear December 29, which is two days before he officially leaves the company. But Turner's lawyer said that his client is on a family vacation, and both sides have agreed to postpone the deposition until the week of January 31.

It remains unclear how much information Turner would share that could help the opponents' cause. Turner, who was in charge of Duke's regulated utilities in Indiana, Kentucky, Ohio, North Carolina and South Carolina, has testified about the Edwardsport plant numerous times before the utility commission and always defended the plant's merits.

But Turner's close relationship with David Lott Hardy, the former chairman of the utility commission, has recently come to light. The Indianapolis Star has published e-mails that may suggest improper contact and show Turner and Hardy exchanged frequent e-mails about the company's plans to hire away current and former state regulators.

Turner also offered Hardy boat rides and bantered about sports and cars.

“Would the ethics police have a cow if you and the woman came up some weekend?” Turner wrote on July 2 while boating on Lake Michigan. Hardy wrote back: “Probably — we might ‘be in the area' some afternoon, but I won't be doing this forever.”

Gov. Mitch Daniels, after Energy Summit concerns surfaced, fired Hardy in October, saying Hardy was aware of job discussions Duke was having with top utility commission attorney Scott Storms but didn't stop Storms from handling Duke cases.

Last month, Duke fired Storms along with Mike Reed, president of its Indiana operations, in connection with the scandal. Earlier this month, Turner resigned from Duke, as the company braced for ethics fallout amid the scandal, citing the “distraction” over his published e-mails.

The FBI and the Indiana inspector general are continuing to probe the matter, and in related litigation a judge ruled Duke misled jurors about a witness in a separate case. No one has been charged with a crime.

Turner was the second-highest-paid executive at Duke, pulling down total compensation last year of more than $4.3 million.

The Edwardsport plant is one of the most expensive projects in Indiana history. It would be the first commercial-scale gasification plant in the country when it starts operating in 2012.

The company says the 630-megawatt plant is sorely needed to keep up with growing energy needs and would replace several older, coal-fired power plants. Duke, based in Charlotte, N.C., is the largest electric utility in Indiana, with 780,000 customers in 69 of the state's 92 counties.

Two weeks ago Duke agreed to reopen the Edwardsport deal on the plant's latest round of cost overruns, worth about $500 million. That could clear the way for large industrial customers to push for the utility to swallow more of the rising cost.

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