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Justices take Rockport gasification appeal

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The Indiana Supreme Court will hear an appeal that could determine the fate of a controversial proposal to fund a southern Indiana coal gasification plant with guaranteed prices above current market rates for the substitute natural gas it would create.

Justices Thursday granted transfer in Indiana Gas Company, et al. v. Indiana Regulatory Commission, 93S02-1306-EX-00407. A divided Court of Appeals panel reversed an Indiana Utility Regulatory Commission order approving a contract that would have funded the plant in Rockport.

The appellate panel was divided over whether the state’s entire contract must be voided because the definition of “retail end use customer” differs from the statutory definition. The majority ruled that it must, but Chief Judge Margret Robb argued in dissent that only that portion of the contract with the errant language must be voided.

Transfer to the Supreme Court was expected after the Indiana General Assembly in the closing days of this year’s session deferred to the court in Senate Enrolled Act 494. Plant backers blasted the action and Gov. Mike Pence’s signature on the bill, saying it may have doomed a project championed by former Gov. Mitch Daniels, which is expected to cost at least $2.4 billion. But the plant’s backers vowed to press on.

“We will work hard for a win if the Supreme Court takes the case,” Indiana Gasification LLC said in a statement after Pence signed SEA 494. “If we win, however, only a clear reversal of position by the governor would enable the project to go forward.”

Opponents celebrated the Legislature’s about-face, casting the plant as an untested design, an environmental menace and a brazen example of crony capitalism benefiting former Daniels adviser Mark Lubbers, now project director for Indiana Gasification.

Even if the justices reverse the Court of Appeals, SEA 494 would trigger a new round of state regulatory review. Leucadia National Corp., the parent company of Indiana Gasification, announced it was suspending work on the Rockport site pending judicial review. Leucadia said it has spent $20 million on the Rockport proposal to date. 

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