Coal-to-gas plant developers suspending activity

Decision comes after lawmakers approve regulation

INDIANAPOLIS - Developers of the proposed $2.8 billion Rockport coal-to-gas plant will see their ongoing legal battle through to its end, but are suspending all other activity related to the project.

The decision comes just three days after state lawmakers approved a tough new regulatory measure that those developers had warned would kill the state's 30-year contract to buy and then resell the plant's synthetic natural gas -- and therefore the entire effort.

"The judgment of the state is very clear: Neither the legislature nor the governor support the contract or the project," said Mark Lubbers, project manager for Indiana Gasification, the company being financed by Leucadia National Corp.

He said if the Indiana Supreme Court does not opt to weigh in on the battle between his company and a coalition of opponents led by Vectren Corp., "the project is dead." If the five-member high court does take up the case, he said, developers could win there.

"If we win, however, only a clear reversal of position by the governor would enable the project to go forward," Lubbers said.

The Indiana General Assembly approved a bill in the wee Saturday morning hours that would trigger a new regulatory review of the Rockport project if the courts order any changes at all to the original 30-year contract -- and changes are seen as likely, since the Indiana Court of Appeals already ruled that 37 words must be struck from that deal.

During the new review, lawmakers instructed the Indiana Utility Regulatory Commission to consider new ratepayer protection standards in place that weren’t there when former Gov. Mitch Daniels' administration signed the deal with developers in 2011.

Lubbers said the bill created too many hoops to jump through.

His company and other advocates of the project, including the coal and labor lobbies, pushed lawmakers for an alternate proposal that would have led to a non-binding review -- but they were not successful.

"We have labored hard for seven years to build a project that would have been a game-changing innovation for energy policy, environmental policy and the utility regulation paradigm. In almost 30 years of working in or around the making of public policy, I have never been associated with anything more far-reaching," Lubbers said.

"I am saddest for the terrific people of Spencer County who were true partners in making this huge project possible. We had begun to dream with them about the future of Rockport and the region. I know they must be sick about this; we are too."

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