INDIANAPOLIS —Despite pressure from Vectren Corp. and others who are lobbying to scuttle the whole project, a 20-year, $120 million tax credit for the Rockport coal-to-gas plant might have a home.
The Republican fiscal leaders in the House and Senate said they are considering dropping the tax credit into House Bill 1072, a tax administration measure that touches on a wide swath of issues, ahead of this week's end of the 2012 legislative session.
However, neither was ready to say Tuesday that they believe the tax credit, which the Rockport plant's developers say is important to getting a federal loan guarantee from the U.S. Department of Energy, can pass.
They say they want the coal-mining jobs and homegrown energy that would come with the project, but they don't want to send ratepayers' bills upward — and they might have to pick between those two objectives.
"There might be a difference between a good deal for consumers and a good deal for Indiana," said House Ways and Means Committee Chairman Jeff Espich, R-Uniondale.
"If we created thousands of mining jobs, for instance, and boosted the economy for Southwestern Indiana, and ensured a greater level of energy independence, that would be a good deal for Indiana. It may not be a good deal immediately for consumers."
The credit is meant as a carrot to push the developers to use Indiana coal — a step tied to the job-creation aspect of the Rockport plant.
Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said he's not sure whether the tax credit will win final passage — even though Gov. Mitch Daniels' administration is pushing for it.
"We don't know the answer to that question yet. It's a reason to stay 'til Friday," he said.
The tax credit was originally considered part of the 30-year deal that the Indiana Finance Authority negotiated to have the state buy, and then resell to Indiana ratepayers, 38 million dekatherms each year of the gas produced at Leucadia National Corp.'s Rockport plant.
However, since the Indiana Utility Regulatory Commission greenlighted the deal last year, Vectren has sued, seeking to block the Rockport plant from qualifying for the tax credit.
They're asking lawmakers to take a bigger look at the overall project. They say the $6.64 per dekatherm average rate for the synthetic natural gas from the Rockport plant, which will make up 17 percent of all Hoosiers' gas bills, is too low of an estimate.
And even if it wasn't, they say, the shale-gas boom has lowered natural gas prices to $2.50 per dekatherm, and according to the New York Mercantile Exchange, those prices will stay low over the next decade.
"We firmly believe that if this project goes forward, our customers — all the customers in the state of Indiana — will see charges on their bills for years to come," Jerrold Ulrey, Vectren's vice president for regulatory affairs and fuels, told a panel of lawmakers that included Kenley and Espich on Tuesday.
Others agreed, and urged lawmakers to stop the Rockport plant before construction has started.
"If those in the business of natural gas are reluctant to go beyond five and seven years, why is it a good deal for ratepayers to be forced to pay a fixed price, no look-back, for 30 years?" asked Kerwin Olson, head of the Citizens Action Coalition, an environmental advocacy group that has long opposed the project.
Proponents, though, said now is not the time to revisit a Rockport plant that lawmakers first approved in 2007. Rep. Sue Ellspermann, R-Ferdinand, said the plant will bring "1,000 construction jobs, 200 high-wage plant jobs and 300 or more coal-mining jobs."
Democratic Rep. Peggy Welch of Bloomington said her party, which is a small minority in both chambers, hopes the tax credit won't work its way into a bill.
But another Republican fiscal leader said the end of the session is no time to reconsider a project that, as a matter of public policy, is already settled.
"The tax credit was contemplated essentially all along. This only provides a clarification of that credit," said Senate Tax and Fiscal Policy Committee Chairman Brandt Hershman, R-Lafayette. "It doesn't do anything that wasn't conclusively voted on by the General Assembly multiple times."
Kenley and Espich have until the end of this week to decide whether they will insert the tax credit into a bill.
"Regardless of what we do this year," Kenley said, "this issue is going to be under scrutiny, not only by the General Assembly in the future but by the public until we've got a success story here."