By Tim Grimes
Proponents of a bill that would modify a contract at a gasification plant in Rockport said Thursday that they think the bill is a good deal for ratepayers.
Senate Bill 510 would change a 30-year contract that calls for the state to purchase nearly all the substitute natural gas produced by Indiana Gasification, the plant being developed by Leucadia Corp., in Rockport. The state will then resell that gas in the energy market and the savings - or losses - will be passed through to natural gas customers through their utility bills.
Now, some lawmakers are saying that 30 years is too long to see if the plant will be productive. SB 510 would make Indiana Gasification and the state settle any profit or debt every three years, instead of after 30.
Leucadia says the contract - signed under former Gov. Mitch Daniels's administration - will deliver cost savings over its 30-year lifespan.
"It's only a homerun for us if the consumer makes money," said Leucadia Vice President Don Maley.
Maley said that three years at a time is not long enough because the plant will lose money in the first years because of the large capital investment it took to get the plant off the ground.
But critics of the gasification plant say the price of natural gas has dropped since the company first proposed the plant and now the deal could cost ratepayers more money.
Kerwin Olson, executive director of Citizen's Action Coalition, said the General Assembly has a duty to protect ratepayers.
"Leucadia's coal gasification project in Rockport is a bad deal for Hoosier ratepayers and families," Olson said. "The General Assembly should act to ensure that Indiana's residential, commercial, and smaller industrial gas customers are not stuck with such a raw, risky deal."
The Indiana Manufacturer Association and the Indiana Chamber of Commerce both support the bill. Patrick Bennett, spokesperson for the Indiana Manufacturers Association, said the Rockport plant should be self-sustainable and not rely on ratepayer money.
"This project, as valuable as it is, should stand on its own merit," Bennett said.
The committee didn't vote on the bill and Sen. Jim Merritt, R-Indianapolis and head of the committee, said they would do that next Thursday.
Tim Grimes is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.
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