The utility said the new coal units will be much more efficient than the company’s existing baseload plants. “These are going to be very efficient, very good units for our customers for many years to come,” Gene Klappa, chairman and CEO, WE Energies.
Indiana Gasification Wins Agreement to Purchase Output from Planned CTN Gas Plant
In the first deal of its kind for the state, the Indiana Finance Authority in late December gave unanimous approval to a 30-year purchase of most of the output from Indiana Gasification LLC’s proposed synthetic natural gas plant near Rockport in Spencer County.
Under the agreement, which still must be endorsed in 2011 by the Indiana Utility Regulatory Commission, IFA would take title to 84% of the 40 billion cubic feet of pipeline-quality syngas produced annually for distribution to customers by the state’s utilities.
The $2.3 billion project’s detractors, led by the Citizens Action Coalition, said the unusual arrangement would be a “boondoggle” for customers and smacked of “Socialism” because the state essentially is forcing ratepayers and taxpayers to become guarantors “of a highly speculative venture before the private sector will even think about financing this plant.”
Indiana Gasification, a subsidiary of Leucadia National Corp., acknowledged it needed the state’s involvement to provide “credit coverage” for the project. William Rosenberg, president of e3 Gasification, a co-sponsor, said developers now hope to wrap up negotiations for a potential $1.87 billion loan guarantee from the U.S. Department of Energy. “The state IFA acquires the gas and arranges distribution of that gas to the gas customers of utilities and the utilities are the collection and distribution agent,” Rosenberg said. Indiana Gasification plans to sell the remaining 16% of the syngas “on the open market.”
IFA would buy the gas at a “formulaic price” for three decades starting in 2015, when the plant is targeted for operation.
“We’re out to pay Hoosiers instead of people elsewhere for the energy we need,” said Republican Governor Mitch Daniels, who has backed the project since its inception four years ago.
Supporters say the project would create hundreds of permanent and 1,000 construction jobs in southern Indiana. It also would create a market for up to 4 million tons of Indiana’s high-sulfur coal annually.