New coal plant could get 30-year deal without regulation

Consumer and environmental advocates are urging the Indiana Senate to reject legislation proposed by out-of-state developers that is designed to improve the prospects for private financing of a multibillion-dollar power plant in Southern Indiana that could not otherwise be secured. The Indiana House passed the bill earlier in the legislative session.

The proposed plant is a coal gasification facility designed to produce synthetic gas for sale to Indiana’s major local gas utilities, NIPSCO, Vectren and Citizens Gas. If passed, House Bill 1722 would lock in a 30-year contract between the developers of the coal gasification plant and gas utilities that could not be altered by the Indiana Utility Regulatory Commission or any other state or local government entity.

Opponents of this measure say that while the Indiana Utility Regulatory Commission must still approve a contract for Indiana gas utilities including Nipsco, Vectren and Citizens Gas to purchase gas from Indiana Gasification LLC, that contract, if approved, cannot have any “look back provisions.” Thus, HB 1722 forces Indiana ratepayers to become the guarantors of a speculative project with sight-unseen-30-year contracts.

“House Bill 1722 changes the current regulatory standards for review to enrich out-of-state developers and protect the financial interests of investor-owned utility companies at the expense of ratepayers,” said Grant Smith, executive director for the Citizens Action Coalition of Indiana. “Without including likely cost overruns for construction, operating and maintenance costs, and fuel costs, claims that the project will yield lower and less volatile prices for natural gas and long-term energy security are totally without merit.”

Among the considerations that factor into the long-term costs of the plant are the prospects of future carbon regulation to address global warming. Future regulations would likely add significant new costs to the operation of the plant, increasing the likelihood that the plant will not be economical or in the interests of consumers.

“Instead of promoting coal as the only approach to meeting future energy needs, the Legislature should be focused on clean renewable alternatives and energy efficiency,” said Brian Wright of the Hoosier Environmental Council. “This legislation simply ignores the cheaper alternatives and does nothing to address the need for Indiana to do its part to reduce greenhouse gases.”

With no ability to change or back out of this contract, opponents believe the legislation ties the hands of regulators by locking in consumers even if there are other cheaper resources, directly circumventing current law that local gas utilities have to provide the cheapest natural gas possible to customers.

For more information contact the Citizens Action Coalition of Indiana at www.citact.org or the Hoosier Environmental Council at www.hecweb.org. 

Step it up!

An environmental call to action

A new grass-roots organization called Step it up! is calling on a nationwide day of hundreds and hundreds of rallies on April 14 to raise awareness about global warming.

“We hope to have gatherings in every state, and in many of America’s most iconic places: on the levees in New Orleans, on top of the melting glaciers on Mt. Rainier, even underwater on the endangered coral reefs off Key West,” says organizer Bill McKibben. “We need rallies outside churches, along the tide lines in our coastal cities, in cornfields and forests and on Statehouse steps.”

The group plans to link pictures of the protests together electronically via the Web before the weekend is out in order to have the largest protest the country has ever seen, “If not in numbers, in extent,” McKibben says. “From every corner of the nation we’ll start to shake things up.

“We need creativity, good humor, commitment,” McKibben emphasizes to those considering participating. ”If you are active in a campus group or a church or a local environmental group or a garden society or a bike club, or if you just saw Al Gore’s movie and want to do something, then we need you now. And by now, we mean now.”

For more information, go to www.StepItUp2007.org.