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By STUART CASSIDY
Staff Writer, Spencer County Journal-Democrat
ROCKPORT – A Tuesday- morning ruling issued by the Indiana State Supreme Court opens the door for Leucadia and Indiana Gasification to move forward on establishing a coal-to-gas facility in Spencer County.
The plant has been mired in legal battles for more than a year after gas markets plummeted and Vectren officials and other opponents argued low gas prices made the venture a bad deal for consumers.
Such remonstrance prompted an amendment in an Indiana Utility Regulatory Commission contract with Indiana Gasification concerning a definition of retail-end-use customers that many believed could have potentially killed the deal.
Under the amendment, opponents argued the revamped language should require a review by the Indiana Finance Authority and be subject to new IURC laws.
Pitched as a hedge against rising gas prices, under the contract, the state would buy the plant’s synthetic natural gas at a fixed price for 30 years. The state would then resell the gas to consumers, who would likely receive lower prices for the utility. Speculation has estimated the cost of the product would need to be in the $7 range to be profitable for the company.
In their ruling, the high court found the amended contract is compatible with the state’s legislation for synthetic natural gas and dismissed claims against it as “moot and affirm the IURC’s order approving the contract.”
Whether the $2.8 billion plant actually will be built is still to be seen. Some believe gas prices that are still well below the companies estimated contract price may call into question the company’s feasibility. Earlier this year Gov. Mike Pence said he supported a review of the company and the contract and threatened to sign legislation to ensure it happened.
However, company leaders have long said they expect to see a drastic upswing in gas prices, and the goal was always for customers to see a guaranteed savings over the course of the contract.
Responses to the ruling came from several groups opposed to the plant’s construction.
“Whether the Supreme Court ruled in our favor or not, the facts show this project simply makes no sense economically for any party,” said John Blair, president of Valley Watch. “Leucadia has used stale data in their models and will face serious financial consequences if they choose to move forward, which I suspect they will not.”
“We are disappointed by the Indiana Supreme Court’s decision, but our work will continue to protect Hoosier families and businesses from this coal gasification boondoggle,” Jodi Perras, Indiana Campaign for the Sierra Club’s Beyond Coal Campaign, said. “The justices ignored serious flaws in the state’s contract to buy expensive coal gas and pass the costs on to Indiana natural gas customers. The contract doesn’t guarantee savings for rate-payers. With each passing day of low natural-gas prices, it confirms even more that the contract will cost Hoosier ratepayers billions of dollars.
“Indiana lawmakers sent a message earlier this year that Leucadia’s get-rich-quick scheme is no longer welcome here and should not come at the expense of Hoosier families,” Perras’ statement continues. “The Supreme Court’s decision does not meet the General Assembly’s intent to save ratepayers money. We will be reviewing this decision and deciding our next steps for ensuring that Hoosier families are safeguarded from this sweetheart deal that guarantees profits for the well-connected few at the expense of working families and small businesses. We also will urge the Indiana Utility Regulatory Commission to reject the amended contract should it be presented to them because it no longer makes economic sense for Indiana or its millions of small natural-gas customers.”
Kerwin Olson, executive director of Citizens Action Coalition, released the following statement:
“It’s really a shame that the Supreme Court couldn’t muster the courage to act in the public interest and put an end to this ponzi scheme, which has delivered nothing to our state outside of hemorrhaging millions of taxpayers’ dollars and countless public resources. The court has unfortunately extended this circus and side show. If this were a viable project, it would’ve been built by now. That said, Citizens Action Coalition will remain vigilant in opposing this fiasco should Indiana Gasification continue to pursue this ridiculous idea.”
The ruling can be found at https://docs.google.com/file/d/0BwIXiaj8LQ3GZmRFUmNDWWxDOHM/edit?pli=1.