The subsidiary of Charlotte, N.C.-based Duke Energy was compelled to defend the continuing need for the nearly $3 billion plant on which construction is halfway completed in Knox County after Republican Governor Mitch Daniels abruptly fired Indiana Utility Regulatory Commission Chairman David Hardy for allowing Scott Storms, a former IURC general counsel and chief administrative law judge, to pursue a job with Duke while he was presiding over the Edwardsport case. The IURC originally approved the project in late 2007. At the time, its estimated cost was $1.95 billion. Since then, the price tag has soared by about $1 billion and a settlement agreement that would cap the cost at $2.975 billion is pending before the commission.

Storms left the commission and was hired as Duke’s assistant general counsel in late September. Following Hardy’s dismissal, Duke placed both Storms and Mike Reed, the Duke Energy Indiana president who had negotiated the Storms hiring, on paid administrative leave. Three separate investigations were opened into the controversy: The Indiana Inspector General, on orders from the governor, began looking into the conflict-of-interest implications of the Storms-Hardy saga; Duke hired an outside law firm to conduct a similar inquiry; and the IURC launched an internal investigation, saying it would examine all Duke cases from January 1, 2010, through September 30, 2010, in which Storms was involved.

Of all the probes, the IURC’s potentially is the most threatening to the project. The commission said it will internally audit all Edwardsport coal gasification plant cases dating back to 2006 and requested that James Rogers, Duke’s chairman, president and CEO, personally attend a technical conference in November in Indianapolis to describe the continuing need for the plant, which would produce about 630 megawatts of electricity and replace an older 160-megawatt coal plant at the rural site.

Storms, Hardy and Reed all were unavailable for comment. An IURC spokesperson said the agency would cooperate with all investigations.