Conflict of Interest Questions on Rockport 

click to enlarge COURTESY OF JOHN BLAIR, VALLEYWATCH.NET
  • Courtesy of John Blair, ValleyWatch.net

By Leigh DeNoon

Conflict-of-interest questions are being raised about two Indiana state lawmakers who've made changes to a Rockport gas plant bill intended to protect natural gas customers from paying for possible losses from an Indiana state contract with Leucadia National Corp.

The contract guarantees that Indiana Gasification, a Leucadia subsidiary, will save natural gas customers $100 million at the end of the 30-year contract term. Ratepayer protections in the bill were weakened by State Rep. Matt Ubelhor, R-Bloomfield, who is operations manager for Peabody Coal's Viking Mine, and Sen. Jim Merritt, R-Indianapolis, who is the Indiana Rail Road Co.'s vice president for corporate affairs.

click to enlarge Rep. Matt Ubelhor, R-Bloomfield, did not respond to a request for comment. - THESTATEHOUSEFILE.COM
  • Rep. Matt Ubelhor, R-Bloomfield, did not respond to a request for comment.
  • TheStateHouseFile.com

As head of the Senate Utility Committee, Merritt introduced an amendment that watchdogs say stripped the bills two most import consumer protections: 1) defining the contract's "guaranteed savings" and 2) requiring Leucadia to refund to consumers any overpayments every three years. Likewise, Ubelhor introduced an amendment that stripped similar protections from the House version of the bill.

In response to a request for comment on this story, Merritt issued the following statement: "My employment with the Indiana Rail Road Company has always been completely transparent. I do not believe there is a conflict of interest with this issue. The Indiana Rail Road Company does not serve the existing Rockport plant and has no plans to do so under the current proposal."

Ubelhor did not reply to a request for comment.

According to Kerwin Olson, executive director of the Citizens Action Coalition, ratepayers need the protective legislation because the state contract would otherwise leave them holding the bag.

"The public interest appears to be coming in second place to the special interests," he charged. "So, we're obviously hopeful that elected officials will do their due diligence and do their job, and make sure that the public interest is protected."

Olson noted that "a lot of monied interests," from coal to labor, want to see the plant built. He noted that when the House prepared to vote on Ubelhor's amendment, it declined to use a traditional roll-call vote, which would have recorded the individual votes of each lawmaker, in favor of a Division of House vote, which left only the final vote tally in the public record.

Senate Bill 510 would have had regulators review the contract every few years to protect ratepayers, and was broadly supported by half of the Senate, plus the Indiana Farm Bureau, the Sierra Club, Citizens Action Coalition, AARP Indiana, and the NAACP. The bill didn't make it to a vote, and was allowed to die after an amendment by Ubelhor weakening regulatory review.

click to enlarge Sen. Jim Merritt, R-Indianapolis, chairs the Senate Utilities Committee. - LESLEY WEIDENBENER/THESTATEHOUSEFILE.COM
  • Sen. Jim Merritt, R-Indianapolis, chairs the Senate Utilities Committee.
  • Lesley Weidenbener/TheStatehouseFile.com

Vectren, an Evansville-based utility, opposes building the coal gasification plant in Rockport and estimates the deal will cost ratepayers over a billion dollars during the first eight years.

Jodi Perras, Indiana representative for the Sierra Club's Beyond Coal Campaign, said that without legislative protections for consumers, all Indiana natural gas customers and taxpayers are left in a poor financial position.

"Essentially there's going to be a surcharge on our natural gas bills because of this plant," she declared. "We're calling it the Leucadia tax. Leucadia is the name of that New York company that wants to build this plant, using our money and our loan guarantees, so they can make a profit."

Developers of the $2.8 billion plant say Senate Bill 510 would have killed the project. Rep. Suzanne Crouch, R-Evansville, the House sponsor, hopes to find a way to revive the legislation before the session ends April 29.

Leigh DeNoon is news director of the Indiana News Service.

-Rebecca Townsend contributed to this report.

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