Gail Riecken challenges Gov. Pence On Rockport Coal Gasification Project

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Gail Riecken

Dear Governor Pence:
 
Even though the 2013 session of the Indiana General Assembly ended two months ago, there are still many unanswered questions about Senate Enrolled Act 494, which is supposed to outline a process to determine if the Rockport Coal Gasification project is good for utility ratepayers across our state.
 
SEA 494 is supposed to go into effect after the Indiana Supreme Court decides that the Indiana Utility Regulatory Commission made the right decision in approving a contract between the Indiana Finance Authority (IFA) and the plant’s developer, Indiana Gasification. The plant would turn coal into substitute natural gas.
 
As I’ve said, there are many questions that need to be answered in order to ensure that a proper public review has taken place. Governor, I am hoping that you will make sure those matters are addressed.
 
First, the heat map from the IFA and used to support SEA 494 tested various scenarios that should be updated with forecasts of future gas and coal prices. The data formula used and the review should come from independent experts.  Please help make sure that this information is updated and there is an independent analysis of that data.
 
Second, I believe there should also be an independent review of the estimates provided by Vectren, the chief opponent of this project. Their review – which claimed losses to ratepayers of close to $1 billion – was based on assumptions that the price of natural gas would stay under $4 during the first 15 years of the contract. It would be nice to take a look at their estimates in depth, but Vectren has not produced that detailed information to date. Even so, their price estimates do not jibe with any publicly available forecasts of gas prices that any of us have seen. They simply don’t make sense.
 
During House testimony on this bill, experts said the price of shale gas can’t stay low because the cost of producing it is twice what the market price has been.  The financial troubles of companies like Chesapeake, the largest shale gas producer until last year, would seem to bear this out.  And the truth is that NO ONE knows what the price of gas will be 15 years from now. It’s hard to say what it will be 15 weeks from now.
 
Indiana Gasification concedes that it is possible that substitute natural gas may cost more than natural gas.  But they say that if it does, consumers will be happy with low cost natural gas and will probably be saving a lot of money on the other 83% of their bill. In that case, consumers would do well but Indiana Gasification would not. 
 
Lastly, it is fair to question the definition of “savings” as used in SEA 494.
 
It is unfair to make savings a standard for one energy company — Indiana Gasification — and not all energy companies. This new standard must now be applied to all rate cases that come before the IURC. If not, the actions of IURC are prejudicial at best.
 
 
Just last week, Vectren announced they have entered into a contract to buy gas over the next 5 years.  The substitute natural gas plant was required to GUARANTEE consumer savings, and that guarantee was backed under the contract by everything that Indiana Gasification owned.  Where is Vectren’s guarantee of savings to the consumer on its long-term contract for gas?  There’s nothing wrong with any company entering into these types of long-term contracts for gas, but it is hard not to compare the two situations and feel there’s a double standard at work. 
 
This project is hard to lose, Governor. It was potentially the biggest project southwestern Indiana has known to date, a $2.8 billion project that would have provided up to 2,000 jobs at high wages, generated more than $30 million in state taxes over the first 10 years (plus local tax benefits), and provided greater opportunity for additional job creation through spin off companies and suppliers.
 
Hoosiers need to know that if the project fails, it does so with accurate information.
 
Thank you for your action in this matter.
 
Respectfully,
 
Gail Riecken                                                                           
State Representative                                                              
District # 77                     

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7 COMMENTS

  1. Great work, Gail…please keep fighting for Southwestern Indiana…people in the North need to know that we exist!!!

  2. Gail, rumor has it that Indiana University is seriously considering placing the new Med School east, which means, Warrick County…our deal Mayor must have this eyes focused on the hotel, and by focusing on this project, will miss the train ending up with a downtown hotel, 37.5 million in debt, severely effecting the local hotel industry…this guy must think we have a printing press pumping out $100 bills!!!

    • I bet you $10 that the spineless City Council will vote unanimously to borrow that $37.5 Million and hand it to an out of town developer in a gift wrapped box. The “Deal Mayor” as you call him can’t pay for deals without the signature of our spineless City Council on the check. All that BS from John Friend, Connie Robinson, and Al Lindsey about the Johnson Controls deal was just political posturing before rolling over willing to have a fistfull of those $100 shoved up their backsides while voting “AYE”. We expect spineless, brainless voting from Missy and Weaver but for these three to have rolled over has doomed Evansville to the fate of other rust belt has beens.

      • Didn’t the work of Dr. Adams, Connie Robinson, and John Friend get the crap out of the contract, that is the fiber network, the Wi-FI, and other items saving millions of dollars…in addition, due to the prior privatizing of the utility, over 75% of the water meters had not been replaced for years, putting millions of dollars in their pockets, leaving us with mass replacement of meters…and, by the way, didn’t Friend scrutinize the fiber network asking why million on fiber when cell technology would suffix..guess what, according to individuals inside the utility, they will be using cell technology…Weinzapfel must be very unhappy and his sidekick Rolley knowing that a great opportunity has fled the City…thank God the City occasionally has some sense, and I say this with reserve!!!

      • Dear BrightSpot….please keep in mind that under the Lloyd Sr. administration, Sr brought this city to the brink of bankruptcy…this Mayor we have now will be doubling down on Senior’s play book…it goes something like this…Evansville has mostly been a democrat town, thereby, usually a democrat mayor knows his base will most always be there and, as such, can afford to say no to a lot of spending requests, obviously, with some exceptions (Johnnie Boy), however, when republicans arrive at the door of the mayor’s office, they certainly know that they have to buy their friends, so they load up on more administration positions in order to obtain financial loyalty…just like what is going on, JCI, now the doubling down on the hotel, Robert’s Park…just more to come…we better hope that Friend strips a set on and stops the compromising and NOW, Sunday School is OUT!!! Remember Detroit did not go BK over night!!! Wonder if this is why the press has been after Friend…Winnecke’s Nazi-style henchman, Schaefer’s backdoor antics, has Friend succumb to his cryptenite..better stop believing in Mother Goose!!!

  3. Hey, is there any basis for the rumor that Chief Connelly & Company are planning to load additional high paying administration positions in the upcoming budget?? Hope big Al keeps his eyes open to this!

    • HE WON’T BECAUSE IS NOW IN THE TANK OF MAYOR AND UNIONS.

      THE VOICE OF THE COMMON FOLK HAS SOLD OUT TO BIG BUSINESS.

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