UPDATE: Duke Energy Indiana seeks OK for natural-gas units at Cayuga in $3.3B project

Duke Energy Indiana's headquarters in Plainfield (Google Maps image)

Duke Energy Indiana filed a petition with the Indiana Utility Regulatory Commission asking for approval 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.

The Plainfield-based utility said the project will coincide with the retirement of the almost 60-year-old coal-fired units at Cayuga—the oldest of Duke’s Indiana coal plants—and once complete would add 470 megawatts in capacity compared with the coal units.

Customers will see a rate increase of about 5.4% between 2026 and 2031 if Duke receives approval to add to electricity rates over time rather than at once. Duke said adding the rates gradually will reduce financing costs, saving about $812 million over the life of the new plant. In its filing, Duke said the first of the incremental rate increases would be about $1.87 for a typical residential customer using 1,000 kilowatt hours.

Duke spokesperson Angeline Protogere said IURC approval for the project could take six months, and that each step of the rate adjustment has to be approved by state regulators.

“Indiana’s economy has been growing, and with that comes an increased demand for electric power. It’s a good challenge to have,” Protogere said. “We have worked closely with the state on helping to attract new investment in jobs, and so we are now working to meet that demand for more energy.”

Increased demand for energy in Indiana includes investments in manufacturing and hyperscale data centers. “Power generation is a complex, extensive process, and so we start planning today for generation that is needed in the future,” Protogere said.

Kerwin Olson, executive director of the consumer and environment advocacy group Citizens Action Coalition, was largely critical of the project.

“While we are thrilled that the dirty and expensive Cayuga coal units will finally be shut down, we’re disappointed that Duke will replace with another fossil fuel rather than clean and sustainable renewable energy,” he said in an written statement. “Ratepayers should not be forced to involuntarily finance the operations of a monopoly utility owned by a behemoth out-of-state energy holding company.”

Duke provides electricity to about 900,000 customers in 69 Indiana counties.

Olivia Rivera, spokesperson for the Indiana Office of Utility Consumer Counselor, which represents ratepayers, told IBJ the agency’s attorneys and staff would review the request before taking a position.

“We will have several weeks to conduct our legal and technical review before we file testimony with the commission, including our recommendations,” she said. She added that customers can submit any comments and concerns in writing at in.gov/oucc.

In its filing with the IURC, Duke said the first of the two new gas units would be operational in September 2029 and the second unit in May 2030, combining for 1,476 megawatts.

Duke said the new natural gas power generation will bring environmental benefits including cutting the rate carbon emissions by 40%, sulfur dioxide by 99% and nitrogen oxide by 80%.

The utility said the two highly efficient combined-cycle natural-gas-fired units would also resolve issues with limits in coal-generated power during peak summer demand because of temperature impacts on the Wabash River used by the Cayuga plant.

Protogere said a gas plant can generally ramp up for operation in a matter of two to three hours, compared with a coal plant taking up to 24 hours to come online for service.

Duke said the project would add about 250 construction jobs a year, with 550 at peak construction.