Developers, lawmakers look to Supreme Court for Rockport decision

Developers of the plant were dealt a tough blow by the General Assembly and acknowledged that the chances of their project going forward are now about 5 percent. They are looking to thread a tough needle now in court.

The battle is over the Indiana Finance Authority’s 30-year contract to buy 80 percent of the synthetic natural gas made at the plant financed by Leucadia National Corp. at a pre-negotiated rate, and then resell that product on the open market.

The deal also ties 17 percent of the bills paid by all Hoosier gas buyers to the Rockport plant’s prices essentially a bet that ratepayers will save money over the long haul.

Opponents want the state’s high court to strike down the contract, or at least send it back to utility regulators for another review. Because of the state’s new law, such a new review would require the project to meet standards that were not in place when it was conceived.

One clear way for developers of the plant to win is for the Indiana Supreme Court to approve the contract as originally drafted and approved by state regulators.

“Following the Supreme Court’s decision, if they uphold the decision by the Indiana Utility Regulatory Commission, the statute is very clear that the contract is upheld,” Gov. Mike Pence said Monday.

That, though, is seen as unlikely.

After all, the Indiana Court of Appeals ruled in October that one 37-word definition was in violation of state law and needed to be struck from the contract and therefore, the court voided the IURC’s approval of the deal.

Developers say they have no problem dropping those 37 words. They’re arguing for the legal outcome envisioned in the dissent Judge Margaret Robb filed when the Court of Appeals made its decision.

Robb said the courts should order those 37 words struck, but she wrote that since doing so would not amount to a substantive change to the contract, the IURC’s approval of the deal ought to stand.

If developers convince the court to buy into Robb’s argument, that’s where things could get tricky.

The measure lawmakers approved this year would trigger the new IURC review of the deal the review that Indiana Gasification project manager Mark Lubbers said would kill the effort if the courts do anything short of affirming the IURC’s order approving the deal “in its entirety.”

The question is whether lawmakers left any room for the Supreme Court to find a way to strike the 37 words and yet green-light the contract in a way that doesn’t set into motion the new regulatory review.

House Speaker Brian Bosma, R-Indianapolis, offered little clarification during a news conference last week.

“Every word, every jot and every tittle of the whole thing have been litigated the whole way, so I don’t want to impact that or give my personal opinion in any way, other than to say, if it’s a contract, it’s a contract,” Bosma said.

“The words speak for themselves. We don’t have legislative intent here. There are 150 legislators that are going to have a different opinion as to what they had in mind when the bill passed. The court’s going to have to look at the words in the statute that’s what they’re going to have to live with.”

Opponents of the project which includes Vectren Corp., the Indiana Manufacturers Association, the Indiana Chamber of Commerce and several consumer advocacy and environmental organizations are seeking a broader win.

They are asking the Supreme Court to also determine whether consumers should be guaranteed savings during the course of the 30-year contract, rather than just at its end, as well as whether the contract actually provides for a solid guarantee of those savings.

There is another key question related to the Supreme Court’s consideration of the Rockport contract: Whether one justice will recuse himself.

Justice Mark Massa, who was appointed by former Gov. Mitch Daniels, previously served as Daniels’ general counsel and worked in the governor’s office when the Rockport project was in its early stages.

Lubbers, the Rockport project manager, is Massa’s friend he actually hired Massa from the Evansville Press to work in former Gov. Robert D. Orr’s administration and spoke at the justice’s investiture ceremony.

A cadre of opponents of the project said last week that Massa should not be involved in the court’s decision on Rockport.