Rockport Indiana Gasification Plant–Is it dead or alive?

Posted by Laura Arnold  /   May 01, 2013  /   Posted in 2013 Indiana General Assembly, Indiana Utility Regulatory Commission (IURC), Uncategorized, Vectren  /   No Comments

I thought I would share with you two drastically different views on the future of the proposed Rockport Indiana Gasification plant. You decide.

http://www.indystar.com/viewart/20130430/BUSINESS/304300056/Rockport-gas-plant-developers-bit-hope-keep-project-alive

Indiana Gasification Suspends Activity

The following is a statement from Mark Lubber, project manager of Indiana Gasification regarding the recent activity in the Indiana General Assembly regarding the Rockport plant.

If the Supreme Court takes the case, the Ct of Appeals decision is immediately vacated, so the IURC approval is again live.  The Ct of Appeals opinion was not unanimous and we have asked the court to side with Chief Judge Robb’s dissent, which said that the Court could have upheld the IURC approval and dealt separately with the definition problem.  Since then, of course, the parties have dealt with that admittedly inartful definition language by deleting the offending 37 words from the definition of Retail End Use Customer; so the problem identified by the Ct of Appeals no longer exists. 

If the Supreme Court takes the case, we think we have a good chance of winning. 

If the Supreme Court does not take the case, the project is dead.  The legislature and the governor knew this when they opted for the language in the law just-passed.  There was an alternative way for the IURC to have a “final look” at the project to consider if the contract was still good for ratepayers given supposed changes in the energy market.  That alternative was rejected in favor of adopting new standards that the legislature and the governor knew would kill the project.  (Because it would require a different contract and two years of review that the project cannot sustain.) The decision to take this path was a conscious decision to kill the project. 

Since this conscious decision was made, the judgment of the state is very clear: neither the legislature nor the governor support the contract or the project.  Therefore, the claim made by legislative leadership and the governor that everything is fine if the Supreme Court sides with us is a false promise; no one would invest  $750 million where such clear opposition from the government is evident.  The institutions that provide the capital to build a plant of this size will not do business in a state that is so cavalier about the $20+ million dollars we have already invested.   

We will finish the judicial review that has been going on now since December 2011.  We will file today a motion for the Court to schedule oral argument.  We will work hard for a win if the Supreme Court takes the case.  If we win, however, only a clear reversal of position by the Governor would enable the project to go forward.

I also feel compelled to share this post about the above statement from Mark Lubbers.

John Blair ·  Works at Self Employed - freelance photojournalist

Great picture by the way. But more importantly, Leucadia has been luke warm about this project for for a very long time. They have failed to cooperate with the US Department of Energy in securing their $2 billion+ federal loan guarantee as DOE has tried to do and Environmental Impact Statement. In fact, public documents from the DOE show that this project is not even on their radar any longer due to Leucadia's acquiescence. Frankly, as a party to the the Supreme Court proceeding, Valley Watch is kind of amazed that Leucadia is so willing to diss the State of Indiana for finally seeing through their scam to escape the risk of building a multi billion dollar plant and forcing Indiana consumers to assume that risk for them. As it is, their contract is currently null and void due to language that they agreed to when the contract was originally written. But maybe Lubbers is confident that his buddies on the Supreme Court will once again bail this bizarre business plan out. http://www.in.gov/judiciary/citc/files/massa-lubbers.pdf

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Now fast forward to the story written by Tony Cook with the Indianapolis Star which ran 5/1/2013 in my home delivered edition of the newspaper. So what is the real story here?

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Rockport gas plant developers have bit of hope to keep project alive

Apr. 30, 2013,

Written by Tony Cook

In the run-up to a Saturday morning vote in the General Assembly, developers of a proposed coal-gas plant in Rockport declared emphati­cally that the legislation would kill the $2.8 billion project.

But on Tuesday, the plant’s developers said they have no plans to drop a case pending before the Indiana Supreme Court, suggesting they see some hope — even if it’s slim — for keeping the project alive.

At issue is a measure that lawmakers approved during their final act of this year’s legislative session. It would require a new, more stringent regulatory review of the contract between the state and Indiana Gasification, a subsidiary of New York-based Leucadia National Corp. that is leading the effort to build the plant.

Lawmakers who supported the bill said they were concerned about the project’s potential impact on ratepayers. They have said the new review would be triggered only if the contract is voided or changed in the courts, where it is being contested.

Indiana Gasification had said the measure would kill the project regardless of any court decision because the additional regulatory hurdles would prove prohibitive.

On Tuesday, though, the company softened that stance. If the Indiana Supreme Court vacates a lower court decision and upholds the entire contract, the project could survive, said Mike Murphy, who handles public relations for the company.

“That’s the only way it could survive,” he said.

Opponents of the project criticized Indiana Gasification for its previous claims that the legislation would kill the project regardless of any court decision. The company’s plans to continue the litigation, they say, reveal that the earlier claims were a veiled attempt to bully lawmakers and the governor into backing off.

“Black is white and white is black with these guys,” said Kerwin Olson, executive director of Citizens Action Coalition, a consumer group that opposes the plant.

The measure is now in the hands of Gov. Mike Pence. He hasn’t signed the legislation, but he said Monday he had a hand in crafting the bill  and is supportive of  it.

Mark Lubbers, project director for Indiana Gasification, said Tuesday the legislation threatens the project because of the message it sends to investors.

“Since this conscious decision was made, the judgment of the state is very clear: Neither the legislature nor the governor support the contract or the proj­ect,” he said. “We will work hard for a win if the Supreme Court takes the case. If we win, however, only a clear reversal of ­position by the governor would enable the project to go forward.”

The plant, which would convert coal to synthetic natural gas, has become a lightning rod of controversy amid concerns that it could drive up home heating bills. Under a deal developers struck with the administration of then-Gov. Mitch Daniels, the state would buy the gas at a set rate for 30 years. If the state can’t sell the gas for a profit, all Indiana ratepayers would have to make up the losses on their monthly natural gas bills.

Opponents, led by Evansville-based Vectren Corp., have said the deal would cost ratepayers more than a $1 billion over the plant’s first eight years of operation. Indiana Gasification has disputed that estimate.

Both sides lobbied law­makers fiercely throughout the session. The Sierra Club and other environmental and consumer groups called, emailed and wrote to lawmakers more than 6,000 times, according to Shane Levy, a spokesman for the Sierra Club.

Indiana Gasification, meanwhile, emphasized the 1,500 jobs it said the plant would create. It found an advocate in Rep. Matt Ubelhor, a coal mine manager who successfully proposed an amendment that watered down a previous version of the bill in the House.

Ultimately, though, a measure similar to the earlier House version was resurrected in a House-Senate conference committee and ultimately was approved.

Call Star reporter Tony Cook at (317) 444-6081 and follow him at twitter.com/indystartony.

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