Challenge for Duke Energy is finding proper balance between cost, environment

Wednesday, September 18, 2013

By ERIC BERNSEE

Editor

Electric energy in the 21st century is -- to steal a popular old advertising tagline -- not your father's Oldsmobile.

Pondering the fate of the Hoosier energy landscape is akin to the dilemma of either repairing your trusty old car or buying a shiny new vehicle, Duke Energy's Indiana president told Greencastle area business and education leaders Monday afternoon.

Addressing local business and education leaders Monday at DePauw University's Prindle Institute for Ethics, Duke Energy Indiana President Doug Esamann speaks to the challenges the electric power company faces in the immediate and long-term future.

Making Indiana's coal-fired power plants environmentally sound yet fully functional to generate the state's electrical power is like trying to decide between dropping a new engine into your 2000 Oldsmobile or ponying up for a brand new 2013 model.

"You either put an expensive new piece of equipment on them or retire them and replace them with something new," Duke Energy Indiana President Doug Esamann told about two dozen invited guests of the Greencastle/Putnam County Development Center during a luncheon at the Janet Prindle Institute for Ethics at DePauw University.

"That replacement is going to be more expensive, there's no getting around that," Esamann said of weighing the options of retooling or replacing 1956-era coal plants.

Through it all, he assured, Duke Energy wants to provide "reliable power that's economic and realistically clean."

"It's a big issue for us here in Indiana," he allowed. "The challenge we have is finding the right balance."

Affecting that balance are such factors as costs, rate structure and sustainability issues.

"And the pace of change always comes into play," the Duke Indiana president stressed.

Making everything environmentally friendly and sustainability suitable at once throughout the Duke Energy power grid would be as impossible as it would be cost-prohibitive, he assured.

"We have to turn this ship rather slowly," he said as captain of a vessel navigating the seas of sustainability yet providing about 90 percent of the electrical power to Hoosier homes and businesses.

"We can't shut all the coal plants down and still provide all that energy to Indiana," Esamann added.

"If you're a sustainability person," he suggested, "you say, 'Please do more; get rid of all your coal.' And if you're an industry person, you're going to say, 'What's going on? I'm concerned about your prices.'"

Duke Energy is fresh from incorporating new technology at its cleaner Edwardsport plant that converts coal to gas and strips out the air-polluting components in the process.

The coal-gasification plant that went on line earlier this summer is a state-of-the-art facility, but a very expensive undertaking with massive construction cost overruns that have been absorbed by Duke Energy shareholders, Esamann said.

Still extremely plentiful in the Indiana area, coal reserves have a life expectancy of 200 to 300 years, depending on which environmental expert you listen to.

So like it or not, coal will likely still be a part of Indiana's power future.

"But we know we have to use it in a way differently than we have in the past," Esamann assured. "We have to convert it to something more environmentally friendly. That is the challenge in front of us."

The Indiana Duke president also believes the future will see additional power generated locally via solar panels on local buildings like Walmart or through wind farms and even hydropower.

"You'll see more of that," he said, "as rates for traditional electricity go up."

Right now, solar and wind power and other energy options only make up 1-2 percent of the Indiana power grid. Part of that is due to the reliability issue, the Duke president said. Business and industry must have an adequate power source to operate their facilities even when the wind isn't blowing or the sun isn't shining.

Wind and solar options are not reliable enough for providing that constant, consistent flow of electricity, Esamann said.

Thus, the power company's model, he acknowledged, "has not changed a lot in 50 years" -- or basically since Reddy Kilowatt was a kid.

"Battery technology could change that," Esamann said, noting that proper development of such technology could do for power what cellular did for the telephone.

Meanwhile, Esamann assured that Duke remains committed to its local communities, even as it has now become the largest electric utility in the U.S.

"We're very active in economic development," he said. "We don't grow unless our communities grow, it's as simple as that."

Part of that is having experienced people at the local level. Esamann proudly noted that Marvin Peters has been involved in the Greencastle facilities of Duke Energy (and Public Service Indiana, PSI, Cinergy, et al before it) for 44 years.

Addressing all the local utility activity in recent months, Peters explained that the Greencastle facilities are being upgraded to accommodate "additional loads."

"We've been busy out there getting things ready for the future," Peters concluded.

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  • I would be interested in knowing, could someone list the twenty four "invited" guests of the Greencastle/Putnam County Development Center to this luncheon?

    -- Posted by Lookout on Wed, Sep 18, 2013, at 9:11 AM
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