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Groups leery of gasification plant financing

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A coalition of environmental and consumer groups urged Indiana legislators Wednesday to repeal or significantly alter a deal to finance the proposed Leucadia coal gasification plant in Rockport.

A General Assembly hearing is set for 8:30 a.m. today on Senate Bill 510, which calls for refunds to consumers every three years if the cost of synthetic gas to be produced by the privately financed plant turns out to be more expensive than natural gas on the U.S. market.

Groups including the Sierra Club, Citizens Action Coalition, AARP, the Indiana Community Action Association, the Indiana Coalition for Human Services, Valley Watch, Spencer County Citizens for Quality of Life and others called on the General Assembly to either repeal or significantly alter the current financing agreement with the state of Indiana.

The Rockport plant is to be developed by private investors operating as Leucadia Corp.

“Leucadia’s coal gasification project in Rockport is a bad deal for Hoosier ratepayers and families,” said Kerwin Olson, executive director of

Citizens Action Coalition, who called the current state-sanctioned financing “a raw, risky deal.”

In 2010, the Indiana Finance Authority signed a 30-year contract with Leucadia Corp. that consumer groups argue places too much financial risk on the state’s residential and small-business ratepayers.

State lawmakers are reconsidering the project’s structure after a court challenge by environmental and consumer protection groups.

“Many older Hoosiers are already under enormous financial stress. They spend a disproportionate share of their income on health care and utility costs,” said June Lyle, state director for AARP. “They should not be further burdened by a deal that will require them to pay above-market rates for natural gas.”

Other groups calling for legislators to act include the League of Women Voters, the Distributed Energy Alliance and Save The Valley.

“We applaud the General Assembly for recognizing the severe consequences of this deal and conducting the first hearings on the legislation,” said Steve Francis, who heads the Hoosier Chapter of the Sierra Club.

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