Duke, Ind. Gov. mark start of work on plant

Jim Rogers, Duke Energy's president and CEO, told Gov. Mitch Daniels and local officials that the 630-megawatt plant's technological innovations were akin to the United States' manned lunar program that beat the former Soviet Union to the moon in the 1960s.

"With this plant we're taking a giant leap for our country," he said.

The southwestern Indiana plant--touted as the first full-scale project 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.

But the Sierra Club and other groups sued Duke Energy in federal court in April, hoping to halt the project, which is on the White River in Knox County. The plant's opponents say it will leave consumers saddled with rate hikes for years to come and that its cost could only grow.

The plant's original cost was projected at between $1.3 billion to $1.6 billion, but earlier this year the revised price tag rose to about $2.35 billion.

Duke Energy spokeswoman Angeline Protogere said the company expects the cost of the project to result in an 18 percent rate increase that would be phased in between now and 2013.

Monday's ceremony at the site, about 15 miles northeast of Vincennes, was billed as a "celebration" because ground preparation actually began shortly after the plant's state air permit was approved Jan. 25.

Daniels said after Monday's event that the plant will be worth its high cost because its pollution-removal technologies will open more of southwestern Indiana's coal deposits for use as fuel. Low-sulfur coals are currently being shipped in from other states to reduce air pollution at Indiana's power plants because much of the state's coal has a high sulfur content, he said.

"Our utility customers spend a billion dollars a year to buy coal from other states because ours with previous technology is difficult to burn cleanly," he said. "We should pay that billion dollars to Hoosiers and today marks the start of that new era."