Indiana Supreme Court Decision Allows Rockport Deal To Go Forward, Utility Consumers Be Damned

It's going to make hundreds of millions of dollars for political cronies of former Gov. Mitch Daniels, but it will hit the wallets of the state's natural gas users hard as they are forced to pay higher utility rates to finance Leucadia's coal gasification plant at Rockport. The Indiana Supreme Court's decision today turning back an appeal by opponents of the project ensures that the corrupt deal that should have been investigated by the FBI will go forward. “We won a complete and total victory,” said Leucadia projct manager Mark Lubbers boasted to the media. Lubbers is a former gubernatorial assistant to Gov. Daniels who was able to work the one-sided deal for Leucadia while drawing a paycheck as a contract employee of the governor's office. Indiana utility consumers will pay the price for this corrupt deal for decades to come, but as long as Mitch's buddies get super rich the Keith Bulen way at your expense, that's all that matters. The Indiana General Assembly shares a great deal of the blame because of its utter failure to exercise independent judgment, let alone represent their constituents, by giving their approval to the deal.

Leucadia Front Man Claims Rockport Deal Dead Because Legislation Requires Oversight Of $2.8 Billion Project

The politically-connected company behind a proposed $2.8 coal gasification plant at Rockport say their plans to build the plant are dead if Gov. Mike Pence signs into law legislation requiring further regulatory oversight of the project. Under a one-sided agreement inked with the company by former Gov. Mitch Daniels, Indiana utility companies would be forced to purchase the high-priced gas produced at the plant, which would be passed on to the state's natural gas utility consumers. The Evansville Courier-Press's Eric Bradner has the company's reaction through the eyes of former Gov. Mitch Daniels' old pal Mark Lubbers to the legislation passed last night by lawmakers before they adjourned for the year.

A tough set of oversight measures for the proposed Rockport coal-to-gas plant has won Indiana lawmakers’ approval despite developers’ warnings that the new standards would surely scuttle their $2.8 billion project.

The legislation’s passage in the House and Senate in the wee Saturday morning hours could ease new Republican Gov Mike Pence's path out of the 30-year contract inked two years ago by his predecessor, former Gov. Mitch Daniels.

Though the state’s deal to buy and then resell the Rockport plant’s synthetic natural gas is the subject of a legal battle currently pending before the Indiana Supreme Court, developers said even a victory there could not save the project.

“We would have never spent a dime on this plant if the law passed tonight had been in place,” said Mark Lubbers, the project manager for Indiana Gasification LLC, which is being financed by New York-based Leucadia National Corp . . .

Lubbers said the resulting bill would force the plant through new hurdles that would delay construction by at least two years, and it would put in place the kind of constant regulatory review that developers had sought to avoid.

As a result, he said, the project cannot go forward.

“The legislature has killed 1,500 high-paying jobs and $1 billion of guaranteed consumer savings,” Lubbers said.

“Indiana Gasification invested $20 million in engineering, land acquisition, permitting and regulatory approval in good faith and in reliance on the rule of law. Now, after four years and on the verge of construction, the legislature has changed the law.”

Well boohoo, Mark. So you won't get the multi-million dollar payoff you expected to receive on the backs of utility consumers. Your loss will be the public's gain. Let's hope that Gov. Pence signs this much-needed legislation to help level the playing field from the public's standpoint.

Leucadia Tax On Natural Gas Users Thanks To Lawmaker Representing Coal Interests

The Evansville Courier-Press' Eric Bradner reports on the adoption of an amendment offered by State Rep. Matt Ubelhor (R-Peabody Energy) by the House of Representatives that strips from SB 510 an amendment adopted in committee that would have required Indiana utility regulators to take another look at the corrupt deal former Gov. Mitch Daniels executed with Leucadia for construction of its $2.6 billion coal gasification plant at Rockport. In order to enrich his political cronies to the tune of hundreds of millions of dollars, Daniels put Indiana natural gas consumers on the hook to pay a premium for natural gas produced at the plant his political cronies propose to build by forcing public utilities to purchase Leucadia's higher-priced synthetic natural gas instead of cheaper natural gas available on the open market.

Rep. Matt Ubelhor, a Bloomfield Republican who manages coal mines for Peabody Energy, successfully pushed for changes that shield the project that he called a huge boon to Indiana’s coal industry from a second in-depth regulatory review.

As a result, the $2.6 billion plant – and the Indiana state government’s contract to buy and then resell its product – would be much more likely to survive legislative and legal challenges from a group of opponents led by Vectren Corp.

“This is an anti-jobs bill. I’m trying to turn it into a jobs-providing bill,” Ubelhor said. “I’m trying to make sure this plant moves forward.”

The changes frustrated opponents of the Rockport project, who argued that it could saddle ratepayers with higher bills. “This thing is a real danger to our economy,” said Rep. Ed DeLaney, D-Indianapolis . . .

“Our ratepayers, maybe by a stroke of luck, will have an opportunity – if we seize it – from one of the worst deals I’ve ever seen negotiated on behalf of anybody,” said Rep. Matt Pierce, D-Bloomington, who called his initial vote in favor of the Rockport project “the biggest mistake I ever made” during his legislative career.

“If you vote for this amendment, Rep. Ubelhor’s, you strip out that opportunity for us to save our ratepayers … and you replace it with the IURC kinda giving us some friendly advice,” Pierce said.

Also splitting with Ubelhor was the Republican chairman of the House Utility Committee, Rep. Eric Koch of Bedford . . .

It must be nice to have a day job like Ubelhor that provides an opportunity to earn merits from your employer for the votes and actions you take as an elected legislator that financially aid your employer. In an unusual move, the Republican-controlled House did not require a recorded roll call vote on the amendment. Instead, a division of the House was called and members supporting Ubelhor's amendment stood and were counted. There were 48 members counted as supporting his amendment, less than a majority of the 100-member body but a majority of those present when the vote was taken.

Rockport Developer Claims Legislation Requiring More Regulatory Review Would Kill Deal: Then Pass It

That controversial coal gasification project at Rockport that is all about making hundreds of millions of dollars for former Gov. Mitch Daniels' political cronies on the backs of Indiana gas utility consumers is back in the news. Indiana lawmakers are considering legislation that would require Indiana utility regulators, who should have never signed off on a deal that was so obviously intended to screw over utility consumers in the first place, to take another look at the one-sided deal. A spokesman for Leucadia, former State Rep. Mike Murphy, claims the deal is dead if the legislation becomes law. The Evansville Courier-Press' Eric Bradner has his reaction:

“If this bill passes as-is, the deal is dead. It is dead, and the largest economic development project of the next decade is gone,” said Mike Murphy, a spokesman for Indiana Gasification LLC, the company launched to run a project being financed by Leucadia National Corp.

The controversy is over a deal between developers and the Indiana Finance Authority, which under former Gov. Mitch Daniels signed a 30-year contract to buy the plant’s synthetic natural gas at a fixed rate and then resell it on the open market. Hoosier ratepayers would serve as guaranteed buyers benefitting from any savings compared to market rates and footing the bill for losses.

The project is opposed by Vectren Corp., which is fighting a two-front battle to block the plant by lobbying lawmakers to beef up the deal’s protections for natural gas customers and asking courts to block the 30-year deal from moving forward . . .

“It accomplishes Vectren’s goal of dragging us down into a pit of quicksand, of bureaucratic morass which we can never extricate ourselves from, because it starts all the due processes over,” Murphy said.

But Mike Roeder, Vectren’s vice president of government affairs and communications, said he thinks developers are crying wolf.

“I don’t hear anything new. Remember, this thing’s been changed five times since 2007, and every time the other side wanted something, they said, ‘If you don’t give us this, it’ll kill the plant,’” he said.

“We have been focused on protecting consumers and encouraging legislators to give prescriptive direction to the commission, should they get another opportunity to review a contract.”

What's actually happening now that wasn't happening when Gov. Daniels was ramming this deal down our throats to make a pile of money for his political cronies is exactly how State Rep. Suzanne Crouch (R-Evansville) explains it:

“The 2 million natural gas ratepayers in Indiana do not have well-heeled lobbyists working the halls of the Indiana General Assembly on their behalf. It is up to legislators to look out for their interests and protect them,” said Crouch, who is sponsoring the bill in the House.

“At the end of the day, we, the legislature, need to ensure that our children and our children’s children are not burdened by unreasonable, unnecessary rate increases,” she said.

The best way to describe the sweetheart deal Leucadia inked with the Daniels administration for the development of its Rockport coal gasification plant is how lobbyist Kip Tew explained his job to Star political columnist Matt Tully: “What I do most of the time here is help one rich guy get a bigger piece of the market share than another rich guy.”

Legislators Want To Take Second Look At Corrupt Leucadia Deal They Can't Undo

Now that the deal is done, some Indiana lawmakers who ignored the obvious when the legislature was considering a coal gasification deal that was simply put forward by Gov. Mitch Daniels to enrich his political cronies want to take a closer look at an agreement they signed off which could force Indiana natural gas utility consumers to pay more than a billion dollars in higher utility prices. The Star's Tony Cook explains how lawmakers can talk about the corrupt deal, but that's pretty much all they can do at this point.

With critics saying Indiana ratepayers would have to shoulder more than $1 billion in losses over eight years, a proposed coal-gas plant in Rockport is likely to undergo significant scrutiny during the upcoming legislative session.

Not everyone believes such dire financial projections will come to fruition. But for those who do, a troubling question remains: Can anything even be done to alter the Rockport deal? . . .

Even a state senator who helped author the enabling legislation in 2009 concedes it might be time to re-examine the deal.

"I think the numbers are speculative but worthy of discussion," said Sen. Brandt Hershman, R-Buck Creek. "If there is a need for enhanced or renewed review, there is nothing wrong with that."

Getting out of the deal could be difficult. Under the contract with Indiana Gasification, the state is permitted to walk away from the deal only under very specific conditions, such as default, bankruptcy, or missed deadlines. Indiana Gasification, on the other hand, is permitted to cancel the deal if it determines that construction of the plant is economically unfeasible for any reason, though the company would be banned from selling gas from the plant to anyone else . . .

Mark Lubbers, Indiana project director for Indiana Gasification and a former chief adviser to Daniels, said if the state pulled out of the contract, there would probably be damages involved, though he wasn't sure about the extent.

"I don't know, and if I did, I probably wouldn't advertise it," he said . . .

What is really disgusting about this discussion is the fact that lawmakers were fully aware that Indiana's natural gas consumers could very well wind up paying higher utility rates if the state entered into a long-term purchase agreement with Leucadia; they simply chose to ignore the inevitable when they signed off on this deal. The fact is that Leucadia officials were begging the state to force Indiana consumers to subsidize the construction of the plant because nobody in their right mind would loan the company the large amount of money it would take to construct a new plant, let alone the high production costs once the plant was constructed. There was always going to be a cheaper natural gas available on the open market. Hershman's notion that the IURC could re-examine the deal is laughable. This is the same corrupt utility commission that has screwed ratepayers time and time again. You don't get appointed to the IURC unless you're in the pocket of utility interests. Consumers have never had a voice on the IURC board. This deal boiled downed to Daniels' long-time political crony, Mark Lubbers, coming to him and saying that he deserved to be allowed to trade his insider government influence to become a multi-millionaire the same way Daniels did it. Mitch agreed, and now  Indiana's natural gas customers will pay dearly. These people could give a damn less how badly they screw over the people; it's all about feathering their own nests.

Daniels' Corrupt Leucadia Deal Could Cost Indiana Gas Customers $1.1 Billion

That controversial coal gasifacation plant being built at Rockport by Leucadia that Gov. Mitch Daniels forced Indiana's gas utility customers to subsidize could wind up costing them $1.1 billion in the form of higher gas prices over an 8-year period, or about $375 per customer according to an estimate by Vectren the Star is reporting. The deal that puts the state's natural gas consumers on the hook to purchase gas produced by the plant at inflated prices was hatched to ensure that the plant pushed by one of Daniels' closest political cronies, Mark Lubbers, who works for Leucadia, would be built when Leucadia couldn't find traditional financing for its plans to construct the coal gasification plant. Vectren has opposed the plant from the beginning because of plentiful natural gas that is already available on the open market at low prices. The part of the story that struck me was the unwillingness of either gubernatorial candidate to take a firm position on the plan:

Neither of the two candidates running to replace Daniels as governor -- Republican Mike Pence and Democrat John Gregg -- has expressed the same level of enthusiasm for the project, creating a potential opening for opponents.

Pence said he's committed to working with both opponents and supporters of the project, while "honoring the commitments the state has already made."
 

Like most of these crony capitalism deals financed by the government, it's a win-win proposition for Leucadia. The state has signed 30-year contracts to purchase natural gas at a guaranteed price that is higher than current market rates regardless of the price of gas at the time it is produced. In the unlikely event that natural gas prices are higher than the guaranteed price, Leucadia would split the profit with natural gas consumers. If the price is lower than the guaranteed price, which is the more likely scenario, then consumers will pay the difference in the form of higher utility rates. Large industrial consumers are exempt from paying the higher costs because they had the political muscle to get themselves exempt from the deal. Small industrial consumers, however, could pay as much as $250,000 in higher utility bills. Small business owners could pay $2,500 in higher utility bills.

 

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.

Rockport Exemption For Industrial Users Removed By House From Tax Bill

It looks like there are some good judgments being made at the Indiana General Assembly this year. An exemption the Senate put into a tax bill, which would have allowed industrial natural gas consumers to avoid the consequences of a long-term purchase agreement the state of Indiana entered into with the politically-connected developers of a proposed Rockport coal gasification plant, has been axed by the House Ways & Means Committee. The Evansville Courier-Press explains yesterday's committee action:

Questions about a synthetic natural gas plant proposed for Southern Indiana led a House committee Wednesday to strip tax breaks for the $2.6 billion project from a bill that already has passed the Senate.

The Ways and Means Committee also eliminated language from Senate Bill 344 that would have taken industrial customers — those who use so much natural gas they strike their own purchasing contracts — out of the customer deal that led the General Assembly to OK the plant in 2007.

“I am still for the project,” said Rep. Suzanne Crouch, R-Evansville, who voted for the Indiana Gasification plant in 2007 and authored Wednesday’s amendments.

“But I believe the General Assembly has provided enough tools for the project,” Crouch said. “When is enough enough? When do we move from a public-private partnership to a publicly subsidized project?”

Evansville-based Vectren Corp. had lobbied for the provisions removal out of fears that consumer prices for natural gas will be even higher than they already will be if utilities are forced to purchase natural gas from the new synthetic coal gasification plant at Rockport above market rates. The prices set in a 30-year agreement with the state are double current market rates.

Officials from Evansville-based Vectren Energy appear to be largely responsible for the Ways and Means Committee’s action. The company has been lobbying against the tax breaks for the project and has appealed a decision by the Indiana Utility Regulatory Commission to OK the 30-year contract between Indiana Gasification and the Indiana Finance Authority.

“We were pleased to see nearly every member of the committee acknowledge that the natural gas world has changed, and that there are serious questions about building a plant that will burden Hoosiers with 30 years of expensive substitute natural gas,” said Mike Roeder, Vectren's vice president of government affairs and communications.

And at least one Indiana lawmaker has figured out that the plant won't even be using Indiana coal as was promised when the original deal was inked.

Rep. Win Moses, D-South Bend, said he initially supported the idea because it would convert Indiana coal to a cleaner fuel and because it seemed like it would save Hoosiers money.

Now, he said, the plant will not be required to use Indiana coal and the savings are unclear.

“I really hoped the governor would pull the plug,” Moses said.

And the political crony of Gov. Daniels behind the deal still claims it's "a great deal for Hoosiers."

Mark Lubbers, who is spearheading the Indiana Gasification project for parent company Leucadia National Corp., has said the project will be a great deal for Hoosiers. SNG produced at the Rockport plant will cost about $6.60 per dekatherm, which he said will be cheaper than natural gas over the 30 year period.

Leucadia's Coal Gasification Deal Looking Like Another Solyndra

The more we learn about the special deal Gov. Mitch Daniels' administration brokered with Leucadia to develop a coal gasification plant in Rockport, the worse it looks for consumers and taxpayers. Indiana lawmakers are now considering an exemption from the 30-year agreement for large industrial customers from the likely natural gas rate increases other utility consumers will be forced to pay because of the deal. Vectren Corp. estimates that Leucadia's coal gasification plant will lose more than $800 million during its first eight years of operation due to low natural gas prices. Under the 30-year deal Daniels brokered for the company, Indiana natural gas customers will be forced to buy synthetic natural gas from the company at $6 per million BTU, even if prices are below that level. The current market price is half that amount. If the large industrial customers are exempt from paying the higher price guaranteed to Leucadia, that means consumer costs will be even higher than they already promise to be. An AP story explains Vectren's opposition to the exemption contained in SB 344, which is now before the House Ways & Means Committee after clearing the Senate:

A utility executive told a legislative committee Tuesday that a drop in natural gas prices as a result of the nation's shale-gas boom has made a proposed southwestern Indiana coal-gasification plant a project "whose time has passed."

Jerry Ulrey, Vectren Corp.'s vice president for regulatory affairs, also told the House Ways and Means Committee that the utility estimates the proposed plant would lose more than $800 million over its first eight years, given current natural-gas price projections.

He testified as the panel considered a bill exempting large industrial customers from rate increases resulting from a state-negotiated gas supply deal for the plant, which is proposed near the Ohio River town of Rockport. The Senate passed the bill earlier this month.

Ulrey told the committee that excluding large industrial customers could end up doubling the rate increases for some of Vectren's 760,000 residential and small-business customers in Central and Southern Indiana, including large portions of the Indianapolis suburbs . . .

You may recall from my earlier posts that this deal seems more about making a bunch of money for one of Daniels' political cronies, Mark Lubbers, who works as a consultant for Leucadia and the developer, William Rosenberg. The company is counting on federal loan guarantees, in addition to the long-term purchase agreement to which Daniels has committed the state under the 30-year deal. Private investors obviously don't want to risk their money on this shaky deal so taxpayers are being forced to finance it for the politically-connected deal makers. Daniels has said the company would help Indiana's coal industry but another provision in SB 344 seems to exempt the company from a requirement that it use Indiana coal. That provision isn't mentioned in the AP story. He also says the company would generate jobs for southwestern Indiana, but it's a few hundred employees at best. I believe if reporters looked into this further they would also find that INDOT is spending a bunch of money on a highway project to nowhere down there specifically to benefit Leucadia's coal gasification plant. Mark Lubbers apparently testified at the same hearing doing his best job of "hey, look over here, not there" routine:

Mark Lubbers, a former Daniels aide who is an Indiana consultant for New York-based Leucadia, said large industrial customers are able to buy from diverse sources, which enables them to hedge against price changes.

He told the Ways and Means Committee on Tuesday that the Rockport project would do the same for other natural-gas customers because the coal that will be bought for the plant historically has had more stable prices.

I'm not sure if there are any voices for consumers in the legislature. With deals like this one, it makes you wonder. Rosenberg is quoted in the story as saying that the IURC knew about all of these facts when it unanimously approved the deal. Of course, the IURC is the most corrupt utility commission in the country which is populated with a bunch of political hacks put their to do nothing but do the bidding of political insiders. Those IURC members could care less about consumers.

IURC Gives Green Light To Deal To Benefit Daniels Crony

A coal gasification deal hatched in order to make millions of dollars for Gov. Mitch Daniels' long-time political crony, Mark Lubbers, and his business associates at the expense of Indiana utility consumers was given the green light by members of the IURC appointed by Daniels to make that decision. Proving just how stupid Gov. Daniels thinks the public is, he claims the deal locks in low gas rates for 1.5 million users when it in fact guarantees the company run by his crony is guaranteed a rate for the natural gas his company produces at nearly double the current market rate for decades to come. The Star's John Russell reports on the latest decision that demonstrates that the IURC panel is nothing but stooges doing the bidding for governor's political cronies.

Gov. Mitch Daniels says it's a smart way to lock in low rates for Indiana's 1.5 million natural gas customers.

Indiana utilities and consumer advocates have warned it's a risky gamble that could backfire, forcing up monthly gas bills.

Smart or risky, a plan championed by Daniels to build a $2.65 billion coal-gasification plant on the Ohio River in southwestern Indiana has taken a big step toward reality.

On Tuesday, the Indiana Utility Regulatory Commission approved the project's most controversial aspect: a 30-year contract for the state to buy synthetic gas from the plant.

The Indiana Finance Authority will spend about $7 billion over three decades to buy synthetic gas from Indiana Gasification LLC.

The state agency would resell the gas on the national market.

Selling the gas at a profit would lower monthly bills for gas customers in the state. But selling at a loss would lead to higher bills . . .

Several Indiana utilities took a look at the project several years ago and balked at the idea of signing long-term orders with the plant. Without their support, banks would not finance the project. That prompted Daniels to get the state involved as a financial middleman.

Indiana Gasification is owned by New York investor Leucadia Corp., whose top Indiana executive is former Daniels chief of staff Mark Lubbers.

Under the plan, the Rockport gasification plant would take in 3.2 million tons of coal each year, produce 47 million BTUs of natural gas and sell 38 million of those BTUs at a firm price to the Indiana Finance Authority every year for 30 years. The state agency would resell the gas daily on the national market  . . .

The risk for Indiana consumers is in the firm price. In sales on the open market, gas prices routinely rise or fall every day with supply and demand.

But the Rockport investors always would receive from the state a firm payment: about $7.57 per 1 million BTUs, or about $7 billion over 30 years. This would cover plant operations, coal costs, shipping the natural gas and loan repayments, plus a small profit of about 5 percent on the $500 million the investors plan to spend on the plant.

On Tuesday, natural gas futures were trading for $3.39 per 1 million BTUs, or less than half the price built into the state's model.

Nevertheless, the Indiana Finance Authority has projected that the project could cut the monthly bill for the average home by 71 cents. That would add up to savings for the typical home of $255.60 over 30 years, which means the gas-burning residents of the state altogether would save about $8.5 million per year.

Yep, this deal demonstrates how a man like Mark Lubbers, who has absolutely no background in public utilities or natural gas, can be tapped to run a company because he had the political muscle to convince Gov. Daniels to risk totally screwing over Indiana utility ratepayers in order to make his long-time political crony a multi-millionaire. Lubbers saw how much money rent-a-civic leader Jim Morris made off of his Indianapolis Water Company antics and wanted his piece of the political pie. Two of Daniels' five IURC members couldn't even cast votes on the deal because of their conflicts of interest.

Two of the five commissioners on the IURC, Kari Evans Bennett and Carolene Mays, have recused themselves from the Rockport matter. Bennett came to the IURC in January from Barnes and Thornburg, a law firm representing Vectren in the Rockport case. Vectren is on the record opposing the Rockport project. Mays is related to a Vectren director.

The IURC's three remaining commissioners -- James Atterholt, Larry Landis and David Ziegner -- voted for the project. All five commissioners were appointed or reappointed by Daniels.

Like I've said before, Indiana has the most corrupt public utility commission in the country. It's nothing but an auction run to line the pockets of the political cronies of whoever is running the state at the time. If the Public Integrity Section of the Justice Department was doing its job, it would have long ago assembled a team of investigators to unravel all of the shenanigans that have been going on at this state agency for decades regardless of which political party is in charge of the governor's office.

As for those 200 miners Daniels says will be put to work because of this deal, keep an eye on that claim. I'm told if Leucadia is looking to operate this new plant efficiently, it won't be buying Indiana coal because of the higher costs associated with using it to produce natural gas. Just a small detail I realize.