Court Blocks Duke Coal Ash Costs

The Indiana Court of Appeals has struck down an order allowing Duke Energy Indiana to recover more than $60 million in coal ash cleanup costs through higher customer rates, ruling that the Commission impermissibly applied a 2023 statutory amendment retroactively.

The panel emphasized that the triggering event for cost recovery under the Federal Mandate Statutes is the imposition of the federal mandate itself, not the utility’s filing date. Because the EPA issued coal ash rules in 2015, years before the statute’s 2023 amendment, Duke’s attempt to apply the change to costs from 2019–2022 was barred.

This decision follows the Indiana Supreme Court’s 2022 ruling in OUCC v. Duke Energy Indiana, where the justices held that Duke could not recover $212 million in coal ash remediation costs incurred between 2010 and 2018. In that case, the Court found that retroactive ratemaking violated Indiana Code section 8-1-2-68, which requires rates to be prospective only. Together, the two cases set firm limits on recovering past expenditures absent explicit statutory authorization.

The latest ruling also breaks new ground on standing. The Court of Appeals held that Citizens Action Coalition, a nonprofit with more than 700 Duke customers as members, had associational standing. The panel concluded that injury to members tied to the group’s mission is a direct injury to the association itself, allowing it to pursue appeals on behalf of ratepayers.

The case now returns to the Commission, which must reconsider Duke’s application or dismiss it. Observers say the ruling strengthens the barrier against retroactive recovery while affirming the role of advocacy groups in challenging utility ratemaking decisions.