OPINION: All signs point to a Rockport coal-to-gas plant

Now, that plant and the state’s 30-year deal to buy its product at a pre-negotiated price and then resell it on the open market, with Hoosier customers benefiting if its rates beat market prices and taking a hit if those rates don’t seems increasingly likely to emerge with only a few scratches and bruises.

It’s early yet. This year’s legislative session doesn’t end until April 29, and anyway, complicated issues often aren’t worked out until the two final frenetic weeks of the session, when joint House and Senate conference committees meet.

But signs are emerging that key legislative leaders prefer to keep their hands out of the deal, leaving key decisions about its future to the state’s courts and to the Indiana Utility Regulatory Commission.

Chief among those signs was a comment by House Speaker Brian Bosma, R-Indianapolis. He told reporters Tuesday that the Rockport plant has dominated his time more than all other issues in recent months, and that his “recent epiphany” is that Indiana made a deal with the plant’s developers and now ought to keep it.

“It’s a very thorny issue,” the speaker, who has questioned whether lawmakers would approve the whole deal in its current form again even though they have green-lighted various portions of it in recent years, said last week.

“The state made a deal, and whether it’s a fair deal or not today, we made a deal and we passed the statutes. So, my inclination would be not to overturn a deal but I also believe it might be productive for the utility regulatory commission to take one more, fast look at it to be certain that long-term, this deal is good for ratepayers.”

The deal was struck two years ago under former Gov. Mitch Daniels. His Indiana Finance Authority negotiated with Indiana Gasification, LLC the corporation set up for the project by its financiers, Leucadia National Corp., and others involved in the plant’s development.

Under that deal, for 30 years, the Rockport plant would convert coal to synthetic natural gas. Indiana would buy its product and deliver it to ratepayers through already-existing utility companies. About 17 percent of all Hoosier gas customers’ bills would be tied to rates negotiated in the Rockport deal, rather than market prices that utilities would typically charge.

Support it or not, there’s no doubt it’s an innovative project one unlike anything else Indiana has done.

It’s also a complicated project, mired in a legal battle. The Indiana Court of Appeals voided that 30-year contract last year, citing a narrow provision, after Vectren Corp. and other gas companies sued to have the entire thing thrown out. Next, the legal battle is likely to shift to the Indiana Supreme Court.

Meanwhile, lawmakers are deciding what to do.

Originally, they were considering a bill that would have beefed up the ratepayer protections included in the contract so much that it would have forced the plant’s financiers to walk away, leaving the Rockport project dead in its tracks.

The plant’s developers fought hard. Mark Lubbers, the former Daniels aide who is managing the project in Indiana, lobbied senators. Jennifer Alvey, who negotiated the contract on the state’s behalf when she was at the Indiana Finance Authority, answered questions about it at a behind-closed-doors Senate Republican caucus meeting.

The Senate ultimately passed a bill that would let the courts have their say first. And then, if they ultimately forced any changes to the contract, the Indiana Utility Regulatory Commission would have to re-examine the whole thing. Senate Utility Chairman Jim Merritt, R-Indianapolis, said he considered that a more appropriate course than letting lawmakers get deeply involved.

But Bosma said last week that he doesn’t want the project derailed because of one narrow provision in the contract. He said he only wants it to undergo another round of regulatory reviews if the state’s high court invalidates the full contract. That suggested the bill that once would have killed the project could be tweaked to defer even more to the courts.

It’s still early. A great deal can change in the next two months. But right now, it appears that while many lawmakers may not like the state’s involvement in the Rockport project, they aren’t willing to use their authority to halt it, either.