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Natural Gas Consumers Forced to Fund New Private Gas Plant

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Today, the Indiana Supreme Court issued a ruling that could force consumers of natural gas in Indiana to pay the long-term construction and operational costs of a private sector coal gasification plant in Southern Indiana. Back in 2010, the Indiana Utility Regulatory Commission, or the IURC, signed a contract with Leucadia National Corporation to allow the company to pass on the full costs, plus a profit margin, of construction, production, and distribution of output from its proposed coal gasification plant in Spencer County. This unprecedented deal would force the Indiana Financial Authority, or the IFA, which is the state agency that purchases natural gas from producers for distribution across the state to consumers, to purchase Leucadia’s product even if cheaper alternatives are available. This would last from the start of the operation of the proposed Spencer plant through the following thirty years. The deal, dubbed the Leucadia Tax, was met with opposition by industrial and residential consumers, as well as many public interest organizations. A coalition of citizens groups, consumer advocates, environmental groups, faith leaders, and low-income and senior advocacy organizations banded together to challenge the contract in court. In October of 2012, the Indiana Court of Appeals threw out the contract between the IFA and the Indiana subsidiary of Leucadia. The opposition coalition also lobbied the state legislators to take action to kill the Leucadia Tax. In the Spring of 2013, the General Assembly passed Senate Bill 494, which would allow the IURC to review the Leucadia contract, with a view to renegotiating a contract that would better protect Indiana consumers if the Appeals Court decision was eventually upheld by the Indiana Supreme Court. One member of the coalition formed to stop the Leucadia Tax was the Indiana branch of the Sierra Club. Correspondent David Murphy spoke to Jodi Perras, Indiana Campaign Representative for the Sierra Club’s Beyond Coal Campaign, for today’s WFHB feature exclusive.

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