Duke Energy Indiana agrees to Cayuga coal unit feasibility study in addition to building new gas units on-site

Rhea-AI Summary

Duke Energy Indiana has reached a settlement with Reliable Energy Inc. regarding its proposed natural gas plant at the Cayuga Generating Station. The agreement includes conducting an engineering study to evaluate the potential sale of existing coal units to third parties after the new gas units become operational in 2029 and 2030. The settlement aligns with Indiana Governor Mike Braun's executive orders on coal unit evaluation and power supply expansion. Duke Energy Indiana will maintain its construction schedule and cost estimates for the new gas units while exploring the feasibility of continued coal unit operation by potential buyers. The company currently provides 6,300 megawatts of owned electric capacity to about 920,000 customers across a 23,000-square-mile service area in Indiana.

Positive

• Agreement maintains Duke Energy's planned expansion of power capacity through new gas units
• Potential preservation of coal units through third-party operation maintains generation diversity
• Settlement aligns with state government's energy policy goals
• Construction schedule and costs for new gas units will not be affected by the feasibility study

Negative

• Uncertainty around the future of existing coal units pending feasibility study results
• Extended timeline for completion with new gas units not operational until 2029-2030
• Potential operational complexity of having different operators at the same generating station

Insights

Energy Infrastructure Analyst

Duke Energy's settlement balances gas expansion with coal preservation, reflecting Indiana's evolving energy policies while maintaining transition timeline.

This settlement between Duke Energy Indiana and Reliable Energy represents a strategic compromise in Indiana's energy landscape. Duke is proceeding with its natural gas units at Cayuga while agreeing to study potential third-party operation of the existing coal units. The company has explicitly structured the agreement to ensure the gas units' construction schedule and costs remain unchanged, targeting operation in 2029 and 2030.

The arrangement aligns with Governor Braun's executive orders that aim to preserve coal generation while expanding capacity. For Duke Energy, this approach offers several advantages: it maintains their energy transition timeline while demonstrating regulatory cooperation, potentially reducing opposition to their gas expansion plans.

The settlement creates a pathway to potentially divest aging coal assets while adding more efficient natural gas generation. This could improve Duke's generation portfolio economics while responding to political considerations in Indiana. The coal unit feasibility study will assess technical viability of continued coal operations under different ownership, potentially extending the lifespan of these assets beyond Duke's own transition timeline.

This development reflects the complex balancing act utilities face in coal-dependent states—advancing cleaner energy transitions while addressing political and economic concerns about traditional generation resources. For Duke, maintaining the gas units' timeline while studying coal preservation options represents a calculated approach to navigate these competing priorities.

• The study will explore the possibility of a sale of existing coal units
• Settlement with state's coal producers is aligned with Indiana Governor Mike Braun's executive orders on coal

PLAINFIELD, Ind., June 17, 2025 /PRNewswire/ -- Duke Energy Indiana and Reliable Energy Inc., which represents several of Indiana's major coal producers, have reached a settlement in Duke Energy Indiana's request pending before the Indiana Utility Regulatory Commission for a proposed new natural gas plant at its Cayuga Generating Station in Vermillion County, Ind.

If state utility regulators approve the gas plant proposal as well as the settlement, Duke Energy Indiana has agreed to perform an engineering study to evaluate the technical feasibility of continued operation of the site's current coal units by third parties that may be interested in purchasing them. Duke Energy would then issue a request for proposal to 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.

"The settlement is aligned with Indiana Governor Mike Braun's recent executive orders aimed at making sure there's a careful evaluation before retiring coal units and encouraging additions to the state's power supplies," said Duke Energy Indiana President Stan Pinegar. "The new natural gas units we've proposed add additional, highly efficient power capacity to Indiana's electric grid. This agreement commits to studying the feasibility of a third party continuing to operate Cayuga's existing coal units once the Cayuga gas units are operational."

A condition of the settlement is that this process will not affect the construction schedule, estimated cost or future operation of the new gas units.

"This agreement represents a meaningful step toward preserving reliable, in-state power generation for Hoosiers," said Reliable Energy President Savannah Kerstiens. "It wouldn't have been possible without the leadership of Governor Braun and Secretary Jaworowski, whose continued commitment to Indiana's energy resilience made this outcome achievable. As the state works to attract new investment and grow the economy, ensuring affordable electricity for working families means keeping every option on the table to maintain generation capacity."

Duke Energy Indiana

Duke Energy Indiana, a subsidiary of Duke Energy, provides about 6,300 megawatts of owned electric capacity to approximately 920,000 customers in a 23,000-square-mile service area, making it Indiana's largest electric supplier.

Duke Energy 

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. The company's electric utilities serve 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 55,100 megawatts of energy capacity. Its natural gas utilities serve 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky. 

Duke Energy is executing an ambitious energy transition, keeping customer reliability and value at the forefront as it builds a smarter energy future. The company is investing in major electric grid upgrades and cleaner generation, including natural gas, nuclear, renewables and energy storage. 

More information is available at duke-energy.com and the Duke Energy News Center. Follow Duke Energy on X, LinkedIn, Instagram and Facebook, and visit illumination for stories about the people and innovations powering our energy transition. 

Contact: Angeline Protogere
24-Hour: 800.559.3853

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SOURCE Duke Energy

FAQ

What is Duke Energy Indiana's agreement regarding the Cayuga coal units?

Duke Energy Indiana agreed to conduct an engineering study to evaluate the potential sale of existing coal units to third parties after new gas units become operational in 2029-2030, while proceeding with construction of new gas units.

When will Duke Energy's new gas units at Cayuga Generating Station be operational?

The two proposed gas units are scheduled to become operational in 2029 and 2030.

How many customers does Duke Energy Indiana serve?

Duke Energy Indiana serves approximately 920,000 customers across a 23,000-square-mile service area with about 6,300 megawatts of owned electric capacity.

How does the settlement align with Indiana's energy policy?

The settlement aligns with Governor Mike Braun's executive orders that require careful evaluation before retiring coal units and encourage additions to the state's power supplies.

Will the feasibility study affect the new gas units' construction?

No, the settlement specifies that the study process will not affect the construction schedule, estimated cost, or future operation of the new gas units.