The Indiana Utility Regulatory Commission on Wednesday approved a settlement between Duke Energy Indiana and large Indiana coal producers to possibly sell coal units that were expected to be replaced by natural gas units to a third party.
Duke Energy had sought approval from the IURC to build two new natural gas-fired units with upgraded transmission lines costing an estimated $3.3 billion at its existing Cayuga Generating Station in Vermillion County.
In the agreement approved between Duke and Reliable Energy, which represents several state coal producers, the Plainfield-based utility agrees to conduct an engineering feasibility study to evaluate the potential continued operation of the Cayuga site’s current coal units by third parties that may be interested in buying them.
As part of the process, Duke Energy would then solicit interest in the coal units, which could be available for sale after the two proposed gas units are placed in service in 2029 and 2030.
Duke Energy—which supplies electricity to more than 920,000 Indiana customers—said the settlement also aligns with Gov. Mike Braun’s recent executive orders encouraging additions to the state’s power supplies and making sure there’s careful evaluation before retiring coal units.
“We appreciate the Indiana Utility Regulatory Commission’s careful deliberation and constructive order,” Duke Energy said in an emailed statement.
The utility added that its Indiana service area has grown by about 126,000 new customers since it brought its last power plant online in 2013.
The Cayuga Generating Station is the oldest coal-fired power plant in Duke Energy’s Indiana system, with the new natural gas turbines increasing generating capacity by 470 megawatts, according to Duke Energy.
“Duke Energy’s exploration of selling its coal units to an independent third party represents a significant step toward Gov. Braun’s vision of ensuring reliable, affordable energy, preserving valuable in-state generation, and strengthening Indiana’s power supply,” Reliable Energy President Savannah Kerstiens said in a joint emailed statement with Duke Energy.
“Enabling third parties to help advance that effort demonstrates the innovative, entrepreneurial approach that defines Indiana’s energy strategy.”
As a result of the Cayuga project, Duke Energy customers will see a rate increase of about 5.4% between 2026 and 2031.
Advocacy group Citizens Action Coalition was critical of the settlement.
“While we are still reviewing the final order, we are extremely disappointed with the IURC’s decisions and findings,” said Kerwin Olson, executive director of Citizens Action Coalition.
“We struggle to understand how this order comes remotely close to satisfying the affordability pillar of state energy policy or the governor’s expressed desire to reduce utility bills. Clearly it’s time for Indiana to take another look at how we define affordability because this order from the IURC is anything but.”