Consumer protections still murky synthetic as Rockport bill advances 

click to enlarge Sen. Jim Merritt, R-Indianapolis, said the Senate Utilities Committee acted Thursday to give consumers more protection from the state’s 30-year deal to buy synthetic natural gas from a plant in Rockport – but only if the courts throw out the contract. - LESLEY WEIDENBENER
  • Sen. Jim Merritt, R-Indianapolis, said the Senate Utilities Committee acted Thursday to give consumers more protection from the state’s 30-year deal to buy synthetic natural gas from a plant in Rockport – but only if the courts throw out the contract.
  • Lesley Weidenbener
INDIANAPOLIS - The Senate Utilities Committee voted Thursday to let the Indiana Supreme Court decide the fate of a 30-year contract that requires the state to buy synthetic natural gas from a plant that's scheduled to be built in Rockport.

Sen. Jim Merritt, R-Indianapolis, said the Senate Utilities Committee acted Thursday to give consumers more protection from the state's 30-year deal to buy synthetic natural gas from a plant in Rockport - but only if the courts throw out the contract.

But as amended on Thursday, Senate Bill 510 would tell state regulators how lawmakers want them to re-evaluate the deal if the high-court strikes it down and sends it back to the Indiana Utility Regulatory Commission for more work.

The bill now moves to the full Senate for consideration.

Sen. Jim Merritt, R-Indianapolis, said the bill will now "give the ratepayer a voice more so than before. And the key term here is public interest."

But Sen. Jean Breaux, D-Indianapolis, said she sees the amended bill as delaying a problem that needs to be fixed.

"It doesn't really address it," Breaux said. "It just says 'We'll let the courts decide it', but once the court's decided, we could still be back where we are, and so that for me is problematic."

Lawmakers had been debating whether to directly intervene in the deal between the state and Indiana Gasification, the plant being developed by Leucadia Corp., in Rockport. The 30-year contract requires the state to buy the plant's synthetic natural gas, sell it in the market and pass the savings - or the losses - to customers across Indiana.

Sen. Jean Breaux, D-Indianapolis, asked a question Thursday during a Senate Utilities Committee meeting. The group approved legislation dealing with the proposed Rockport coal-to-natural gas plant.

The deal includes a guaranteed $150 million in savings - but it wouldn't be paid out until the end of the contract.

Opponents of the deal have said that 30 years is too long to see if the plant will save ratepayers money. As introduced, Senate Bill 510 would have forced Indiana Gasification to settle any profit or debt every three years, instead of after 30.

But Leucadia says that would have scuttled the deal, which was struck by the administration of former Gov. Mitch Daniels, who promised it will deliver cost savings over the life of the contract.

So the committee overhauled the bill so that lawmakers are essentially stepping out of the equation.

The bill will let the state's highest court decide the validity of the contract. If the court doesn't like it, the bill requires state regulators to reconsider the issue keeping the "public interest" in mind.

The legislation also charges the IURC to study the future of shale gas, natural gas and the effect synthetic natural gas will have on the gas market. The bill requires the commission to submit that information to the Regulatory Flexibility Committee, which is made up of lawmakers that serve on the House and Senate utility committees.

The bill passed to the Senate 7-2.

Tim Grimes is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.

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