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House waters down Rockport bill

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CSX coal train near Belknap in Southwest Indiana - COURTESY OF ALANDBERNING VIA FLICKR CREATIVE COMMONS
  • Courtesy of alandberning via Flickr Creative Commons
  • CSX coal train near Belknap in Southwest Indiana


If it survives a legal challenge, the Rockport coal-to-natural-gas plant could be spared a second full review by the Indiana Utility Regulatory Commission after the House overhauled a bill that addresses the controversial project Wednesday.

Instead, utility regulators would spend the spring conducting a more focused look at whether a nation-wide shale gas boom has reduced natural gas prices enough that the Rockport project that was approved in 2011 is now unwise. That review - in a departure from the bill's previous form - would be non-binding.

The changes to Senate Bill 510 came as a result of an amendment by Rep. Matt Ubelhor, R-Bloomfield, a coal miner who said the Rockport plant's use of Indiana coal would bolster the jobs in that industry.

"I guess the big thing here for me is jobs," he said. "This is an anti-jobs bill. I'm trying to turn it into a jobs-providing bill."

Initially, the bill gave the Indiana Supreme Court the first crack at deciding whether a contract that would have the state buy the Rockport plant's synthetic natural gas and then resell it is valid. If the court said no, that would have triggered a full new review by the IURC - with specific instructions from lawmakers to look at whether the deal makes sense for ratepayers.

Now that Ubelhor's amendment has been approved, the bill would not require that second review. The bill is now ready for a final vote in the House - although its specific language is likely to change as House and Senate leaders hash out a final version before the General Assembly adjourns for the year by April 29.

"There are people out here that want to see the project die, period. They want it to be dead immediately. There are those of us that want to see the project move forward. I happen to be one of them," Ubelhor said.

At issue is a 30-year contract the administration of former Gov. Mitch Daniels signed with Leucadia National Corp. that calls for the state to buy most of the fuel produced by the Indiana Gasification plant, resell it on the energy market, and pass the savings - or the losses - on to the customers of natural gas companies across the state. If by the end of the contract, those customers have lost money overall, the contract would require Leucadia to pay up to $150 million, and possibly forfeit its plant.

Daniels touted the deal as a good one for Hoosiers, saying that wide fluctuations in the price of natural gas over time make the synthetic natural gas a stable substitute. But opponents say 30 years is too long to see if the contract will save ratepayers and they claim that recent changes in the market mean natural gas prices will stay low.

Some of the state's natural gas utilities sued to stop it the contract from taking effect and the issue is currently tied up court. Both sides have asked the Indiana Supreme Court to take up the case.

Wednesday's changes frustrated opponents of the plant, who argue that the 30-year deal would put Hoosier ratepayers on the hook for risks that should be taken by private financiers.

"We take on all the risk. If we're successful, we share half and we get to keep half the profits. Who would enter into a contract like that?" said Rep. Matt Pierce, D-Bloomington. "What in the world is the state going to do with a synthetic gas plant that produces a product that is not viable in the marketplace?"

House Utility Chairman Eric Koch, R-Bedford, said he opposed the changes to the measure his committee had just approved last week.

"This bill does not kill the project. This bill does not guarantee the project - nor should it. The bill as it stands defers to the judicial process," Koch said of the bill in the form it passed his committee, before Ubelhor's changes were adopted.

Rep. Ed DeLaney, D-Indianapolis, said the state should look for any way possible to end its involvement in the Rockport project.

"If there is a right to walk away, the governor, the former governor, the IFA, whoever's responsible - please do that and we can all go home and stop talking about this issue," DeLaney said.

TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.

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