POLITICS

Supreme Court decision raises Rockport plant from the dead

By Tony Cook
tony.cook@indystar.com

Just a few months ago, a planned $2.8 billion coal-gas plant in Rockport seemed all but dead.

But on Tuesday, the Indiana Supreme Court effectively raised it from the grave.

In a 5-0 decision, the state’s high court upheld an amended contract between the state and the plant’s developer, Indiana Gasification.

The controversial agreement requires the state to purchase synthetic natural gas from the company at a set rate for $30 years. If the plant fails to turn a profit, Indiana ratepayers would have to make up any losses on their home heating bills.

Critics say the arrangement would amount to $1.1 billion in higher rates over eight years — a figure Indiana Gasification disputes.

The Supreme Court’s decision clears the way for the project to move forward. Project director Mark Lubbers called it a “total victory.”

Still, the project faces at least one more hurdle: Final contract approval from the Indiana Finance Authority, whose five-member board is appointed by the governor.

In the past, Lubbers has said the company, a subsidiary of New York-based Leucadia National Corp., “won’t spend another dime unless we know that the governor is supportive.”

Kara Brooks, spokeswoman for Gov. Mike Pence, said the governor’s office is “reviewing the case, the contract and the relevant law.”

The governor signed legislation passed earlier this year that would have required a new, more stringent review of the contract between the state and the developer if the Supreme Court had voided the deal.

Vectren, a gas and electric utility opposed to the project, said the coal-gas plant is still subject to another review by the Indiana Utility Regulatory Commission.

The legislation was passed during the final moments of the 2013 General Assembly, despite two attempts to water down the bill’s language by lawmakers with connections to the coal industry.

Concerns about possible conflicts of interest also arose when Supreme Court Justice Mark Massa declined to recuse himself from the case despite a close personal friendship with Lubbers and his previous role as chief legal counsel to Gov. Mitch Daniels, whose administration pushed for enabling legislation and signed the deal with Indiana Gasification.

At issue in the Supreme Court case was an earlier appeals court decision that voided the contract because it failed to specify that large industrial gas users are exempt from paying higher rates if the plant fails to turn a profit. That stipulation was required by the enabling legislation.

Consumer and environmental groups lamented the Supreme Court decision.

“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,” said Jodi Perras, Indiana campaign manager for the Sierra Club’s Beyond Coal Campaign.

She said the Sierra Club will be reviewing the decision and deciding next steps.

Call Star reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.