After the Indiana Supreme Court has its say, the Rockport coal-to-gas project could head back to state utility regulators for another round of reviews under a measure the Senate approved Tuesday.
It’s a watered-down version of a bill that originally would have left the plant dead in its tracks by forcing major changes to the Indiana Finance Authority’s 30-year contract with the plant’s developers, Leucadia National Corp., to buy and then resell its product.
Senate Bill 510 passed on a 47-3 vote and now heads to the House, where Leucadia and its opponents – chiefly, Vectren Corp. – will continue to grapple.
“If you followed this through its beginning stages, it’s been through about five different iterations,” said the bill’s author, Sen. Doug Eckerty, R-Yorktown. “I think what we’ve done is settle here on some language that works for everybody.”
The haggling is over the future of a contract that would tie 17 percent of all gas customers’ bills to pre-negotiated rates included in the deal, rather than open-market rates that make up the other 83 percent of Indiana ratepayers’ bills.
The bill would postpone any action until the legal process has wrapped up. The Indiana Court of Appeals last year struck down a narrow provision in the state’s contract, but upheld most of it – leaving the contract voided but the case’s shift to the Indiana Supreme Court likely.
If the five-member high court ultimately upholds the appellate court’s ruling or issues a decision anything short of a full approval of the contract, Eckerty’s bill would then send that deal back to the Indiana Utility Regulatory Commission.
The commission would be tasked with launching a comprehensive review of whether the deal is in the “public interest,” including determining whether the Rockport prices are likely to top open-market rates long term.
Sen. Karen Tallian, D-Portage, was one of the three “no” votes even though she’d initially co-authored the bill. She said her problem is a provision that would have the loser of legal battles related to the plant pay the winner’s attorney fees.
“Can’t live with that – have to vote no, sorry,” she said.
Sen. Jean Breaux, D-Indianapolis, said she preferred the bill Eckerty had initially introduced, which would have altered the ratepayer protection mechanisms in the contract to force Leucadia to reimburse ratepayers for any losses that come from their prices compared to open-market rates every three years – rather than at the end of the 30-year deal, when developers could have to hand the plant over if ratepayers have lost money because of it.
Still, Breaux said she’d support it – and hopes the bill can be beefed up over time.
“I would hope that throughout the process that we might allow a little stronger language to really give the IURC the direction so that it can make a decision that would really be in the best interest of the ratepayers over the long haul of the contract,” she said.
Sen. Brent Waltz, R-Greenwood, compared lawmakers to ancient Romans who, he said, required engineers to live under bridges they designed for six months. Lawmakers must “live with the bridges that we build,” he said.
“Hoosier ratepayers were standing under, I think, a very shaky bridge,” he said.
In its current form, the bill would seem to send the contract back to utility regulators for another review if the Supreme Court upholds the Indiana Court of Appeals’ decision to void it based on a narrow provision that state and Leucadia officials say they’re happy to drop.
But House Speaker Brian Bosma, R-Indianapolis, said he’d look for the Supreme Court to more fully reject the contract if it’s to undergo another such review.
“It’s a very thorny issue,” he said Tuesday. “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 issue will soon move to the House Utility Committee, where chairman Rep. Eric Koch, R-Bedford, will play a key role in determining whether the bill should undergo changes.