The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlement agreement reached in the Duke Energy Indiana case involving the revised cost estimate for the new integrated gasification combined cycle facility (IGCC) in Edwardsport, IN. The settlement agreement set a hard cost cap for the project at USD 2.595B, which prohibits Duke Energy from recovering project construction costs above this amount from retail electric customers, excluding costs related to force majeure situations defined in the agreement. It also requires the utility to absorb nearly USD 900M in cost overruns, given the plant is now projected to cost approximately USD 3.5B. Although Duke Energy is limited in its recovery of project costs, the settlement agreement allows the utility to recover financing charges accrued to fund the project’s construction. Through a modification to the settlement agreement, the IURC also provided USD 28M in additional value to ratepayers by directing Duke Energy to credit customers for cost control incentive payments found to be unwarranted, given the delays that arose from the project cost overruns. The IURC also modified the settlement agreement in such a way that if Duke Energy should recover through litigation claims more than the IGCC project costs absorbed by its shareholders, any surplus recovery is required to be returned to ratepayers.