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UPDATE: Lawmakers with ties to $2.8B plant dilute measures

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Two Indiana lawmakers have spent the legislative session watering down opposition to a $2.8 billion coal-gasification plant that would likely benefit their employers.

The news comes as lawmakers decide whether to place new limits on a deal that mandates the state buy synthetic natural gas from the developers of the Rockport coal-gas plant for the next 30 years, a proposition opponents say could leave Indiana ratepayers on the hook for $1.1 billion in rate hikes.

State Rep. Mat Ubelhor, R-Bloomfield, stripped a measure last week that Rockport developers say would have killed the project. And two months ago, Senate Utilities Chairman Jim Merritt, R-Indianapolis, watered down a measure sought by Rockport opponents designed to increase how often Indiana ratepayers were reimbursed for any rate hikes.

The Evansville Courier & Press reports that Peabody Energy, where Ubelhor works as a mine manager, could easily benefit from a $17 million rail spur built by the Indiana Rail Road Co. to haul coal. Merritt is a vice president of corporate affairs for Indiana Rail.

There's no guarantee the 3.8 million tons of coal Rockport developers expect to purchase would come from any Indiana mines, like the Peabody's, but lawmakers approved $140 million in tax credits designed to ensure the coal is purchased in-state. Nor is there any guarantee that Peabody would rely on Indiana Rail to haul the coal.

But opponents of the Rockport plant have howled about the lawmakers' connections.

"When you have a bill dealing with a highly controversial, very expensive Indiana coal plant, and it is weakened on two different occasions ... I can say that there is a questionable appearance in the eyes of the public about how the whole process went down," Kerwin Olson, executive director of Citizens Action Coalition, told the Courier & Press.

Ubelhor denied and Merritt both denied any conflict of interest Monday.

"I'm a coal miner and proud of what I do," he told the Courier & Press. He also said he understands the criticism, will not answer more questions until after lawmakers decide the plant's fate.

Merritt said he has worked hard to find a measure that supports the public.

"The bottom line is," Merritt told The Indianapolis Star, "we put forward the public's interest."

There are no hard and fast rules in the General Assembly for when lawmakers must recuse themselves from a conflict of interest, nor is it against the law for them to support legislation that could benefit their employers.

Lawmakers have increasingly questioned the state's contract with the developers, which would mandate the state buy synthetic natural gas produced at the plant over the next 30 years. Opponents, including representatives regional utility and potential competitor Vectren Corp., have said that deal could cause ratepayers to eat as much as $1.1 billion in additional costs in increased utility rates.

Rockport supporters point to $150 million placed in escrow to buffer against rate hikes, but it would not kick in until the end of the 30-year contract. Sen. Doug Eckerty, R-Yorktown, introduced a measure that would have mandated the Rockport developers reimburse ratepayers for any losses every three years.

That proposal was diluted in Merritt's commitee, shortly after Merritt met with Nat Noland, the head of the Indiana Coal Council, and a supporter of the Rockport project, according to The Star. The paper reports Noland said he did not discuss any potential benefits for Merritt's employer.

Merritt told the Star his work on the measure followed meetings with representatives on both sides of the issue, not just Noland. He also said he saw no conflict with his day job, working for Indiana Rail.

Merritt also told the Courier and Press the new rail spur is far from a guarantee that his company would carry the coal from Peabody to the Rockport plant. Any coal carried from Peabody's Bear Run mine would have to be offloaded onto lines controlled by separate rail companies to reach Rockport, which could prove costly.

"That's compounding the problem - the distance. There's available coal near Rockport, and we couldn't just take it from A to B. It would be on two other railroads," he told the Courier & Press.

Top lawmakers, and Gov. Mike Pence, appear unified behind an approach that would leave the legal question to the Indiana Supreme Court, and then send it back to the Indiana Utility Regulatory Commission for a review if the court maintains the Rockport contract is no longer valid.

House Speaker Brian Bosma, R-Indianapolis, said he is confident that approach will win final approval.

"The governor, Senate leadership and our team — we're on the same page on this," Bosma told the Courier & Press. "We'll find a vehicle."

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  • Thank you IBJ
    Thank you IBJ for publishing this article. Please keep on reporting on this gross conflict of interest that will cost Indiana taxpayers hundreds of dollars a year EACH. Its funny to see Republicans always talk a good game about cutting taxes, but then turn around and line their buddy's pockets with a backdoor tax increase on citizens.
  • Heartwarming
    It warms my heart to read of these two selfless individuals, courageously pursuing the public interest in spite of the terrible cost to themselves and their employees. We are wonderfully fortunate to have an entire legislature absolutely packed with such ethical and caring persons, but these two really stand out from the crowd. I sleep better at night knowing that they are looking out for the interests of an ordinary taxpayer like me. Well done!
  • Uh-huh
    "The governor, Senate leadership and our team — we're on the same page on this," Bosma told the Courier & Press. "We'll find a vehicle."...to pay off our campaign contributors.
  • SO Much for Citizen Legislators!
    If these clowns do not see the conflict of interest in their votes, their example make a great argument for full time legislators (while banning campaign contributions from companies and industries as well as all entertainment and gift expenditures), might cost more in salaries, but would save taxpayers money by causing legislators to vote on what is best for their constituents!
  • No conflict of interest?
    Yes, it's a conflict of interest. So, are they nefarious politicians, or just dim-witted ones?

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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