By John Sittler
INDIANAPOLIS — A coalition of natural gas companies is calling on their customers for help blocking a deal the state has made to purchase synthetic fuel from a plant proposed for Rockport – and now an alliance of citizens group is jumping into the fray as well.
The controversial 30-year deal calls for the state to purchase nearly all the substitute natural gas produced by Indiana Gasification, a plant being developed by Leucadia Corp., an out of state Wall Street hedge fund.
Former Gov. Mitch Daniels – whose administration struck the deal with Leucadia –promised it will mean lower costs for customers. But critics – including some of the natural gas companies most affected by the deal – say that changes in the industry mean that Hoosiers could end up overpaying to heat their water and homes.
Those companies have created ACT NOW to Protect Hoosier Gas Customers, a group that is urging the General Assembly to intervene. The group has also asked natural gas customers to call their lawmakers and advocate for two bills – Senate Bill 510 and House Bill 1515.
The group says the bills “would protect Hoosier natural gas customers from the financial risks of the proposed substitute natural gas plant by triggering a review and true-up every three years.” The group says the legislation would ensure that customers are not subsidizing private development.
A spokesman for Indiana Gasification did not return a message seeking coment.
The state’s contract includes an agreement for the state to buy the plant’s fuel and then resell it on the open market. If the SNG does not sell in the open market at a price above the contract price, then Indiana’s natural gas customers would receive a charge on their monthly natural gas bills to make up the entire shortfall. When the plant’s SNG price beats the current market price, customers would share in only half of the gain with the plant developer.
An eclectic group of organizations has also banded together to raise support for the bills. Organizations in this coalition include the Sierra Club, Citizens Action Coalition, AARP, the Indiana Community Action Association, Spencer County Citizens for Quality of Life and several others.
“Leucadia’s coal gasification project in Rockport is a bad deal for Hoosier ratepayers and families,” said Kerwin Olson, Executive Director of Citizens Action Coalition. He said that Hoosiers shouldn’t have to bear the financial risk while an out-of-state company rakes in massive profits.
The Senate Utilities Committee will hear SB 510 at a meeting Thursday at the Statehouse.
John Sittler is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.