Duke Energy Settles With Groups, Plans $420 Million Charge

Duke Energy Corp. (DUK), the owner of electric utilities in five states, said it settled with groups over costs to Indiana consumers for a coal plant it’s building in the state. The cost will reduce first-quarter results by 20 cents.

The settlement limits to $2.6 billion the amount customers will pay for the $3.3 billion plant, Duke said today in a statement. Parties to the settlement include Indiana’s Office of Utility Consumer Counselor and others who accused Duke of fraud, concealment and mismanagement of the project, Angeline Protogere, a Duke spokeswoman, said today in an interview.

Settlement costs of $420 million will reduce first-quarter profit by 20 cents a share, Protogere said. The agreement is subject to approval by Indiana’s utility regulators.

The 620-megawatt plant near Edwardsport, Indiana, will convert coal into a gas before burning it, a technology Duke and Indiana officials have said may reduce the cost of capturing carbon dioxide, blamed for global warming. Duke had estimated the plant would cost $1.99 billion in 2006, according to the Consumer Counselor’s website.

Operations will begin in the second half of 2012, Duke said today.

The announcement was made after regular trading ended in New York. Duke, based in Charlotte, North Carolina, was unchanged at $21.43 today in New York. The company is scheduled to report first-quarter financial results May 4.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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