Sunday, March 11, 2012

Lubbers' Coal Gasification Plant Doesn't Need Legislature To Award Its Tax Credit, It's Got Gov. Daniels In Its Back Pocket

The politically-connected developers of Leucadia's proposed coal gasification plant in Rockport, Indiana sought a 20-year, $200 million tax credit from the state during this year's legislative session that caused quite a stir. The company is already the beneficiary of a sweetheart deal the Daniels' administration negotiated with it that forces Indiana natural gas consumers to purchase the plant's product for a period of thirty years at rates that are double the current price for which natural gas can be purchased. When Indiana lawmakers decided enough favoritism to this developer had already been handed it out, it pulled the controversial tax credit from tax legislation. End of the matter? Not quite. The company says it doesn't need the legislature's approval because the Department of Revenue will simply administratively rule that it qualifies for the tax credit. The Evansville Courier & Press reports:
Developers of the Rockport, Ind. coal-to-gas plant do not need state lawmakers’ help to get a 20-year, $120 million tax credit, after all.
Instead, the Indiana Department of Revenue – an agency under the watch of Gov. Mitch Daniels, a champion of the $2.6 billion plant – will rule on whether the tax credit applies. The agency’s likely answer: Yes.
It’s a work-around to avoid asking reticent legislators to once again change the law to help push forward a plant that Daniels calls a great deal, but  Vectren Corp. and other Indiana utilities say will drive ratepayers’ bills upward.
Key Republican fiscal leaders said the Daniels administration had opted to try for that “administrative fix” to forestall potential lawsuits over the tax credit, instead of pressing lawmakers on the issue as the 2012 legislative session reaches its end.
Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said legislation related to the tax credit won’t make its way into a bill.
“Everybody likes to let the legislature solve all their problems for them rather than figure out if they’ve got another way to do it sometimes, and I think maybe that’s what happened in this case,” Kenley said.
The Rockport plant’s proponents said working through the Indiana Department of Revenue is fine with them.
“There was never any doubt in our minds that we qualified under the existing law,” said Mark Lubbers, an Indiana consultant for Leucadia National Corp., the Rockport plant’s developer, and a former top Daniels aide.
“Given the fact that Vectren is spending every dime of ratepayer money they can to slow us down, we wanted to clarify the language in a way to mitigate their next nuisance lawsuit.”
Lubbers' suggestion that Vectren is spending ratepayers' money trying to block the deal is laughable. Vectren is a going concern already employing the people who advocate on behalf of the utility. The only people spending ratepayers' money here is Lubbers and his Leucadia company, which has determined that Indiana natural gas consumers should pay dearly to make what would otherwise be an unprofitable endeavor a potentially profitable one for him and his company by shifting all of the financial risk to the consumers. The reaction of a consumer advocate opposing the plant hits the mark. “I thought we overthrew the monarchy back in 1776,” said Kerwin Olson, the head of the Citizens Action Coalition, an environmental advocacy group that has opposed the Rockport project.

If you thought Lubbers was through tapping the public for support of the Rockport plant, you thought wrong. Securing a federal loan guarantee from the Department of Energy is the company's next step, as if the federal government can afford more Solyndra-like failures. Lubbers tells the Evansville Courier & Press that obtaining the tax credit will provide "all the assurance we need for the Department of Energy loan guarantee commitment." "So, all good,” he adds. Yeah, all good for his wallet but not your's.

1 comment:

guy77money said...

The only way this project makes any sense would be if the auto industry would get off their dead asses and produce a decent natural gas car or truck. Since that is not on the horizon, coal gasification should be put on the back burner (no pun intended) till at least the cost of producing it comes down immensely. Thank god for Citizens Gas at least they won't be purchasing any Rockport's overpriced gas.