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Court clears way for pricey coal gas plant

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INDIANAPOLIS (AP) - The Indiana Supreme Court cleared the way Tuesday for the construction of a $2.8 billion coal-gasification plant in southwestern Indiana, deciding unanimously that a contract with the state was still valid.

The justices ruled 5-0 that changes made by Indiana Gasification, the plant developer, and the Indiana Finance Authority, were not substantial enough to invalidate the contract. Opponents, including a regional power company and Indiana environmentalists, had argued that a change affecting industrial users would require a new contract to be drawn up and reviewed by state regulators.

But the court decided that Indiana Gasification and the finance authority were fine approving an amended contract last year.

“IFA and Indiana Gas have addressed this concern by amending the Contract approved by the (Indiana Utility Regulatory Commission) and rendering it unnecessary for this Court to decide the issue,” Chief Justice Brent Dickson wrote in the court’s five-page opinion.

The contract requires the state buy synthetic natural gas produced by the Rockport plant for 30 years at a fixed price and then resell the gas on the open market.

Supporters say the project will bring hundreds of jobs to southwest Indiana and pump billions of dollars into the state economy. Mark Lubbers, lead developer for Indiana Gasification, said Tuesday he was reviewing the decision with Indiana Gasification’s corporate parent, New York-based Leucadia.

Opponents have said the project will likely have Indiana ratepayers bear the cost of the contract as a spike in natural gas production drives down demand for potentially expensive alternatives. They appeared to win a victory earlier this year when state lawmakers asked for a conditional review of the project, although the high court ruling negates that review.

“Indiana lawmakers sent a message earlier this year that Leucadia’s get-rich-quick scheme is no longer welcome here and should not come at the expense of Hoosier families,” Jodi Perras, director of the Sierra Club’s Beyond Coal Campaign, said in a statement.

Justice Mark Massa found himself under scrutiny on the case earlier this year because of his longtime friendship with Lubbers and his previous work as former Gov. Mitch Daniels’ lawyer when the deal was being hammered out in 2009. But Massa declined to recuse himself from the case.

 

Posted 12/18/2013