Developers say bill would kill Indiana coal-gas plant

The developers of a proposed $2.8 billion coal-gasification plant in southern Indiana say a measure advancing in the Legislature would kill the project.

The House Utility Committee approved a bill Wednesday that would send the project back to regulators for another round of reviews unless the Indiana Supreme Court sides with the project's developers.

The Evansville Courier & Press reported that the case was appealed to the high court after the Indiana Court of Appeals last year reversed the Indiana Utility Regulatory Commission's approval of a crucial 30-year contract.

Mike Murphy, a spokesman for Indiana Gasification LLC — the company launched to run the project financed by Leucadia National Corp. — said that if the bill passes the General Assembly, it would doom the project planned for the Ohio River city of Rockport.

"If this bill passes as-is, the deal is dead. It is dead, and the largest economic development project of the next decade is gone," Murphy said.

The controversy stems from a deal between the plant's developers and the Indiana Finance Authority, which under former Gov. Mitch Daniels signed a 30-year contract to purchase the plant's synthetic natural gas at a fixed rate and then resell it on the open market.

Indiana utility customers would receive discounts or increases on their bills, depending on whether those gas sales make a profit or a loss. The 30-year deal would tie 17 percent of Indiana residents' gas bills to the Rockport plant's rate.

Opponents say the plant would saddle Indiana ratepayers with any losses the plant incurs. One opponent, Vectren Corp., is lobbying lawmakers to enhance the deal's protections for natural gas customers and asking the courts to block the 30-year deal from moving forward.

The bill approved Wednesday is similar to a version already passed by the Senate, but it falls short of what Vectren had sought initially. Under the measure, the Indiana Supreme Court would have the first chance at reviewing the contract. If the court fails to approve any part the contract, the measure calls for state regulators to review the project.

State Rep. Suzanne Crouch, R-Evansville, said no one is particularly pleased with the bill in its current form, but she said that likely means it's a fair compromise.

"The 2 million natural gas ratepayers in Indiana do not have well-heeled lobbyists working the halls of the Indiana General Assembly on their behalf. It is up to legislators to look out for their interests and protect them," said Crouch, who is sponsoring the bill in the House.

Jodi Perras, an Indiana representative with the Sierra Club's "Beyond Coal" campaign, said the changes lawmakers have made to the legislation were positive.

"Really, the idea of ratepayer savings is a policy issue, not a technical issue," Perras said. "That's an issue that the General Assembly ought to speak out about to say that ratepayers have to be protected."