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Saturday, December 24, 2011

Ind. Gov't. - "Steelmaker, others oppose Indiana Gasification contract"

For background to this story, start with this Nov. 25, 2011 ILB entry.

Keith Benman of the NWI Times reports today:

A flurry of appeals have been filed in response to state regulators' Nov. 22 approval of a 30-year-deal to have a state agency buy synthetic natural gas and charge NIPSCO and other utility customers for any losses.

The issue as laid out in appeals filed by ArcelorMittal USA, as part of a group of industrial customers, consumer groups and utilities, revolves around exemptions for large industrial customers.

ArcelorMittal, through the industrial group, argues the exemption is not guaranteed by the Indiana Utility Regulatory Commission's order in the case, although that was the clear intent of state laws paving the way for the 30-year contract.

Consumer groups and utilities are basically arguing the opposite, with their briefs stating the exemption is in fact so broad it could lead to ever escalating natural gas bills for residential and small business customers.

All parties are planning to appeal the commission's final order in the case to the Indiana Court of Appeals, according to briefs filed this week with the Indiana Utility Regulatory Commission. * * *

The state's 1.7 million utility customers will get surcharges on their bills to make up 100 percent of the difference anytime the price of the synthetic natural gas produced at the plant is above the price of natural gas on the open market. If the price of synthetic gas drops below that of natural gas, utility customers will get a bill credit for 50 percent of the difference. * * *

Vectren, one of the state's largest natural gas utilities, warns of a possible "death spiral" for customers and utilities if the Indiana Utility Regulatory Commission's order is allowed to stand. Vectren states in its appeal that the state's utility customers potentially could be on the hook for up to $2 billion in losses for the gasification plant.

Posted by Marcia Oddi on December 24, 2011 09:47 AM
Posted to Indiana Government