The General Assembly was asked to approve the tax incentive to encourage the company to use Indiana high-sulfur coal for the coal-to-gas plant. The Indiana Utility Regulatory Commission already has endorsed a controversial plan for the state to purchase all of the synthetic natural gas produced by the facility. The gas then would be resold to the Midwestern state’s natural gas utilities.
After the Legislature adjourned its 2012 session in Indianapolis in March without approving the tax credit, Daniels, a two-term Republican who leaves office at the end of this year, directed state agencies to intervene. “We’re working with state officials to get the tax credit…we’re pretty optimistic we’ll achieve it,” William Rosenberg, president of E3 Gasification, a project partner, said in an early April interview. Although some legislators said the tax credit would be worth $120 million, Rosenberg said that was not certain. “I think it’s a smaller number over 10 years, but I’m not sure of the number,” he said.
Whatever the figure, he said the tax credit is “very important” for developers. “We were offered it a long time ago to do what we’re doing,” he said. Indiana Gasification could buy up to 3.5 million tons of coal annually for the plant, although developers are allowed to use petroleum coke for 15% of the fuel, if it is cheaper than coal.
While pursuing the tax credit, developers also remain in “active negotiations” with the U.S. Department of Energy for a $2 billion-plus loan guarantee for the project. Rosenberg is optimistic about a favorable outcome with DOE as well.