Leucadia to quit Rockport coal project


By Megan Banta

Developers and opponents of the $2.8 billion coal-to-natural gas plant proposed for Rockport made their case before the state's high court Thursday morning.

Their arguments before the Indiana Supreme Court focused on whether or not the five-member court should reverse a 2012 decision by the Indiana Court of Appeals stating that the contract allowing for the plant does not fully line up with state law.

The Indiana Utility Regulatory Commission approved a 30-year contract between the Indiana Finance Authority and Indiana Gasification, LLC for the purchase and resale of substitute natural gas in 2011.

The Indiana Court of Appeals reversed that approval because the definition of retail end use consumers in one clause of the contract did not match up with the definition provided in state law. The Indiana Finance Authority and the Rockport developers agreed on an amendment that changed the definition in the contract and removed the statutory conflict.

Karl Mulvaney, who argued on behalf of Indiana Gasification, said a different clause in the contract allows for the two parties involved to amend the contract without necessarily triggering another review by the regulatory commission.

And because both parties agreed to amend the contract, which "as now amended now exactly matches statutory definition," Mulvaney requested that the court remand the case back to the regulatory commission with recommendations to approve the amended contract.

But Norman Funk, attorney for the gas utilities companies involved in the case, said the court could be setting a dangerous constitutional precedent by making such an instruction to an agency of the state's executive branch.

Mulvaney, though, said even if the court decides not to make that recommendation, the amendment was one the regulatory commission had agreed the parties should make. He said that is important because now that the definition in the amended contract matches statute, there shouldn't be any reason to not move forward.

But Funk said the clause under dispute is not the only issue with the contract.

He said the contract does not have the required guarantee of savings because the amount of the guarantee cannot be determined until the contract is completed.

"This is an incomplete contract," he said. "This is a guarantee with no teeth and it will not be fulfilled until after the 30 years are up."

Mulvaney, though, said there is a guarantee and that it is not hollow. He said the contract even provides a failsafe to ensure that there are overall savings for the state.

He argued that the court should approve the amended contract or instruct the regulatory commission to do so because the project has the potential to have a large impact on Indiana's coal industry and create more jobs for Hoosiers.

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