Duke Energy Indiana Fuel Docket (March – May 2025)
Synapse provided expert support for Sierra Club in Duke Energy Indiana’s fuel cost adjustment docket for the months of March through May 2025. Synapse’s analysis focused on reviewing and evaluating the prudence of Duke’s unit commitment decisions and related fuel costs. Synapse evaluated Duke’s justification for using must-run commitment status at most of its coal-fired power plants and assessed the savings to ratepayers from operating the Edwardsport plant on gas instead of coal due to maintenance work at the gasifiers during the fuel adjustment clause (FAC) period.
Synapse found that Duke self-committed all its active coal-fired generating units into the MISO energy market during a large portion of the FAC period. After reviewing the 56 daily Profit and Loss sheets Duke prepared during this period, Synapse found that ratepayers were better off with the Edwardsport gasifiers in outage because Duke was required to run the plant on gas rather than coal. Synapse also identified avoidable losses at the Cayuga and Gibson plants from Duke’s self-commitment of coal units during a period in May when Duke’s own Profit and Loss analysis projected losses from keeping the units online. In addition, Synapse found that while Duke maintains a sophisticated commitment process, it often chooses not to follow its own price-based signals, which is to the detriment of customers. Especially during a time of rising electric bills, it is important for Duke to generate the highest possible energy margin in each FAC period to help defray fixed costs and keep rates low.
Synapse recommended that the Commission disallow the avoidable losses Duke incurred at Cayuga and Gibson during the uneconomic events in May. Synapse also recommended that the Commission require Duke to follow price-based signals at Edwardsport and all other plants when making unit commitment and dispatch decisions. Synapse further recommended that the Commission encourage Duke to provide a brief explanation documenting any deviation between the results of its forward-looking price-based analysis (the Profit and Loss Analysis) and its actual commitment decisions. The Commission should presume imprudence and disallow recovery of any fuel costs associated with energy market losses at Edwardsport or any other Duke plant when Duke does not follow its own price-based process. Finally, Synapse recommended that the Commission encourage Duke to publish a public accounting of total revenues, gas and coal consumption, gasifier outages, and projected performance on gas instead of coal for Edwardsport during each FAC period.