INDIANA — The Indiana Utility Regulatory Commission (IURC) has approved Duke Energy’s $3.3 billion financing plan to convert two coal-powered units at its oldest facility, the Cayuga Generating Station, to natural gas.
While Duke Energy officials promise this massive investment will boost Indiana’s energy production and reliability, the cost of the project will be directly passed on to customers through a series of gradual rate increases.
The Cayuga facility, which has been operational for over fifty years, is Duke Energy’s oldest coal-powered generator. The conversion is designed to modernize the grid and significantly increase generating capacity.
The new natural gas units are expected to create “much-needed energy production,” increasing the facility’s maximum capacity by almost 500 megawatts.
According to the IURC’s ruling, Duke Energy is authorized to finance this multi-billion-dollar project by gradually adjusting rates for its customers over time. The utility argues that this approach will lessen the financial burden on ratepayers compared to a single, hefty rate hike.
The specific details of Duke Energy’s rate adjustment proposal for the $3.3 billion Cayuga Generating Station conversion have not yet been publicly filed with the Indiana Utility Regulatory Commission (IURC). Still, new details about the increase are available.
- Rate Increase Methodology: Duke Energy will charge customers for the project in six-month increments over the construction period to smooth out the rate impact, starting in 2026. The new natural gas units are expected to be entirely online by September 2029 and May 2030.
- Customer Impact Estimate: Consumer advocacy groups, such as the Citizens Action Coalition, which opposed the proposal, predict that customers could see increases of at least $20 per month by 2031, when the two gas units are fully operational. Another estimate projected the increase to be as high as $29 per month by 2031.
- Utility’s Claimed Savings: Duke Energy asserts that using the CWIP financing will ultimately save customers more than $812 million over the new plant’s lifetime compared to financing the entire project after completion.
While the IURC order authorizing the financing is final, the precise monthly charge will be detailed in a future filing. The utility stated it anticipates making its first GCA (Gas Cost Adjustment) subdocket filing within one month of the IURC’s approval of the overall project (which occurred on October 29, 2025). This filing will kick off the regulatory process for the actual rate changes.
Duke Energy will provide the exact percentage and dollar amount of the initial increases.
