Indiana Supreme Court says it will take up Rockport gasification plant case

The five-member high court announced its decision to take up the case – a move that both advocates and opponents of the plant hoped would happen – on Thursday, though it has not yet scheduled oral arguments.

The stakes are high. Indiana lawmakers who have soured on the project approved a new regulatory measure that developers say would scuttle their effort, and the only way to avoid that measure’s impact is a big win in court.

“This could be a great thing or a disaster for us – we’ll find out, I guess,” said Kerwin Olson, the executive director of Citizens Action Coalition, which is working to block the Rockport project from moving forward.

“Hopefully they take into account the renewed will of the General Assembly on this project – and we’ll see.”

The battle is over the wisdom of a 30-year contract that the Indiana Finance Authority signed to buy and then resell the synthetic natural gas produced at a Rockport plant that is being financed by Leucadia National Corp.

The contract would tie 17 percent of what all Indiana residential and commercial natural gas users are charged each month to the pre-negotiated prices associated with the Rockport plant, rather than usual, open-market rates.

Advocates of the plant’s construction, including the developers, Rockport city officials and the Indiana Coal Council, whose members hope to sell their product to the plant, say ratepayers are guaranteed to save money over the long haul.

But opponents – led by Vectren Corp., but including the Indiana Chamber of Commerce, the Indiana Manufacturers Association and a host of consumer advocacy groups – say it’s an inappropriate bet for the state to make.

Despite developers’ complaints that the measure would kill the project, Indiana lawmakers this year approved new law designed to impose a tough new set of ratepayer protection standards on the Rockport plant.

The only chance developers have to dodge those new standards is a major – and, they admit, improbable – victory in the Indiana Supreme Court. They need the state’s high court to approve the 30-year contract as it was written, without ordering any changes.

Securing such a win could be tough, since it would require the Supreme Court to reverse a decision made last year by the Indiana Court of Appeals – although the high court’s decision to take up the case makes that possible.

The appeals court struck down utility regulators’ approval of the 30-year contract because a 37-word clause included in the deal runs afoul of state law.

Both the Indiana Finance Authority and the Rockport developers quickly agreed to drop that section from the contract. However, such a move has become problematic: Doing so now would trigger the new standards that lawmakers imposed this year, and which developers say would scuttle the project.

As a result of lawmakers’ actions, Mark Lubbers, who is the Indiana project manager of the Rockport effort, said developers have halted all other efforts to move forward with the plant until the high court issues its ruling.

Not yet clear is whether Justice Mark Massa will remove himself from the Supreme Court’s consideration of the case.

Massa worked in former Gov. Mitch Daniels’ administration was the governor’s general counsel while the Indiana Finance Authority was negotiating the Rockport deal. He later became Daniels’ final appointment to the court.