Two heavyweight organizations in Hoosier politics – the Indiana Manufacturers Association and the Indiana Farm Bureau – say they oppose the state’s current 30-year contract with the Rockport coal-to-gas plant.
The two groups’ lobbyists plan to testify Thursday at a state Senate committee hearing over the plant’s future. They say they want lawmakers to change Indiana’s deal to buy the plant’s synthetic natural gas at a fixed rate and then resell it on the open market.
Patrick Bennett, the Indiana Manufacturers Association’s vice president of environment, energy and infrastructure, said his organization is afraid its small and medium-sized clients will face higher prices as a result, although large industrial companies are excluded.
“Really, the message is going to be that it’s not the role of the state to subsidize the cash flow of a company or to attempt to hedge the commodity price. This project should stand on its own within the current economic development, like the state does with other companies,” Bennett told the Courier & Press.
He said he supports a bill by Sen. Doug Eckerty, R-Yorktown – the one that’s the topic of Thursday’s hearing – to beef up the ratepayer protections in the deal by requiring the plant’s developers, Leucadia National Corp., to reimburse those ratepayers every three years if the plant’s prices top open market rates.
That would be a departure from the current contract, which requires Leucadia to set aside $150 million that would only go to ratepayers at the end of the contract. Leucadia’s top Indiana official, former Gov. Mitch Daniels aide Mark Lubbers, said Eckerty’s bill would kill the plant.
Indiana Farm Bureau director of state government relations Bob Kraft said he too supports Eckerty’s bill.
“Chances are good that in the first few years in particular, the ratepayers will be asked to underwrite the cost of the project through the rates,” Kraft said.
“That being the case,” he said, “our members who have access to natural gas are going to wind up paying a larger, higher rate and not receive any kind of reconciliation until the end of the 30-year period” unless Eckerty’s bill is approved.
The hearing is taking place Thursday morning in the state Senate chamber.