Senate bill aims to protect rate-payers from big charges to pay owners of Rockport coal-to-gas plant
Leucadia plant still unbuilt as lawsuits drag on
Last Updated: 305 days ago
INDIANAPOLIS - The battle continues over a proposed southern Indiana plant that would convert coal into synthetic natural gas.
Consumer groups are pushing a bill in the legislature to protect rate-payers from what they call huge financial risks, but the plant's developers are fighting the measure.
Three years after the state signed a deal with Leucadia Corporation to build the Rockport plant, not one shovel of dirt has been turned.
Now, the legislature is looking to significantly alter the deal, which consumer advocates say should be scrapped.
The deal, which is now tied up in a court battle, called for the state to buy a minimum amount of gas each year at a specified price to then be resold on the open market.
Indiana rate-payers would guarantee that price.
If the actual market price of gas was higher, consumers would benefit, but if it was lower, they would make up the difference in their bills.
And with the abundance of gas now flooding the country, the market price is still considerably lower than the guaranteed price.
"Rate-payers stand to lose by the fact that for 30 years they will be locked into paying excessive rates for the substitute natural gas to come from this proposed power plant,” said Kerwin Olson of the Citizens Action Coalition. “And those rates and charges, we believe, will be nearly twice what the market prices are today."
A bill now before the Senate would require Leucadia to reimburse rate-payers for any losses every three years instead of waiting for the end of the 30-year contract.
That measure was supposed to be heard in the Senate Utilities Committee Thursday, but was postponed while lawmakers consider possible changes.
While former Gov. Mitch Daniels expressed confidence until the end that the deal would be good for Hoosiers, some lawmakers, like the chairman of the Utilities Committee, appear to be losing confidence.
"My confidence level is just a little lower than it was before,” said Sen. James Merritt, R-Indianapolis. “And it all goes back to the price of natural gas and also the lawsuit that surrounds this, that right now there's not a contract."
There is a chance Leucadia could pull out if the legislature makes substantial changes.
"Leucadia would certainly have to review the situation,” said spokesman Mike Murphy. “I'm not saying here today that they would back out, but I would say that they would have to take a serious look at whether it's a viable project here in Indiana."
Leucadia insists that a deal is a deal, but with the court case putting the contract into question, the whole plan appears to be up in the air.
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