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Sunday, May 01, 2011

Ind. Gov't. - "Daniels pushed and pushed for clean coal plant"

A long story in the Sunday NWI Times, reported by Keith Benman.

For background, see this long list of ILB "gasification" entries.

Some quotes:

[W]here Daniels and his allies see their plan as a valiant effort to provide a market for coal and clean up the environment, opponents see nothing but an attempt to pad the pockets of investors and a key ally of the governor.

"Ratepayers are receiving nothing in this deal other than a charge tacked on their bills that will benefit Leucadia investors," said Kerwin Olson, a utility campaign organizer with the Citizens Action Coalition. "They are using a captive rate base to implement their business plan."

Critics such as Olson are quick to point out the involvement of Mark Lubbers, Daniels' former Statehouse political director, who is working for Leucadia as its Indiana Gasification project manager.

In an interview with The Times, Lubbers said he already had left his Daniels administration post when he was first contacted about the Indiana Gasification project in early 2006. He said his wife, then a state senator, recused herself from voting on Indiana Gasification legislation in 2007 and after. * * *

Politics aside, Daniels and other supporters acknowledge the deal is a complex one.

In essence, it has the state's more than 1.7 million utility customers, including those at NIPSCO, paying for losses the Indiana Gasification plant would incur when natural gas prices are low. Conversely, utility customers would get a split of the profits produced when natural gas prices are high.

Natural gas prices were very high when Daniels first announced plans for the plant in October 2006. Natural gas futures were trading around $7.15 per million British thermal units, according to U.S. Energy Information Agency data. Earlier that year, the price had gone as high as $10.63.

Since then, natural gas prices have plummeted. This year, natural gas futures never even approached $5 per million Btus. They currently are trading around $4.20.

Those plummeting prices have significantly changed the profit picture for Indiana Gasification and the state's utility customers. If prices remain that low, the state's utility customers could see regular surcharges on their bills.

A sidebar shows the Indiana Gasification timetable. Missing from it, and from the main story, is recognition of the passage at the end of this session of the pipeline bill, which is now part of SEA 251.

A second story today by the same reporter is headed "Clean-coal gas deal could charge up NIPSCO bills." A quote from the long story:

The Indiana Utility Regulatory Commission has held three public hearings on the contract between the IFA and Indiana Gasification in the past two weeks. Evidentiary hearings before the IURC start Monday in Indianapolis.

Posted by Marcia Oddi on May 1, 2011 07:32 PM
Posted to Indiana Government