The Rockport coal gasification plant is the second recent Indiana energy project boondoggle. Vectren was right to withdraw from the first one in 2007, and it is right to oppose Rockport now.

The first project is the coal gasification plant at Edwardsport, where the construction costs are out of control, and the plant is shrouded in scandal. Duke Energy Indiana ratepayers are already paying hundreds of millions of dollars for the plant -- although it’s not running and won’t be completed for months.

A representative from a Rochester foundry testified at a regulatory hearing that its electric bill for Edwardsport alone would be $30,000 per month -- and that was at approved costs of $2.35 billion. Now the plant is at $3.3 billion, and by the time Duke gets it running probably will cost around $4 billion, if not more.
"A representative from a Rochester foundry testified at a regulatory hearing that its electric bill for Edwardsport alone would be $30,000 per month."
One wonders how many jobs have already not been created or lost from the expected rate impact of this utility-lobby-driven fiasco, with more increases to come.

The cost of the Rockport coal gasification plant is estimated at $2.65 billion. However, Leucadia and its contractor have no experience building coal plants, and the ratepayer will be exposed to cost overruns past a certain amount and to fluctuations in coal prices, which are increasing because the global market sets its price.

The other aspect of these boondoggles is that neither plant is needed.

On the electric side, our region of the country has sufficient power reserve margins. Natural gas is now approximately half the cost at which the Rockport plant will produce synthetic gas.

And Leucadia is just plain wrong. You don’t hedge against future natural gas prices by building a huge, costly boondoggle that “stabilizes” prices much higher than they should be and is based on a fuel, coal, that is also subject to price volatility. Rather, you become much more energy efficient, which is much cheaper and actually saves businesses and consumers money.

As we know, mining is an extraction industry. So are Duke’s and Leucadia’s business plans. Their push for new coal plants will extract billions of dollars out of the Indiana economy with little return. The build-and-burn mentality is weakening the Indiana economy and forcing us to rely on technology that is quickly becoming, if not already, obsolete.

Neither rate-paying consumers nor businesses should be saddled with the construction and operational risks of these highly complex and difficult-to-engineer projects that are subject to significant cost overruns when electric demand is falling and cleaner. Cheaper options are available to meet electric demand well into the future.

In other words, there is no reason to bring another coal (or nuclear plant for that matter) online in Indiana or anywhere else in the country. Indeed, the systematic replacement of both coal-fired and nuclear plants can begin now with ramped-up energy efficiency and renewable power investments without sacrificing electric grid reliability.

Finally, we must keep in mind that Duke territory overlaps substantially with Vectren (Indiana Gas) territory. Those ratepayers in both Duke and Vectren territory will be hammered twice, with high electric bills due to Edwardsport and high gas bills due to Rockport. That huge part of the state will suffer a “double whammy” under the boondoggles orchestrated by Duke and Leucadia.

Grant Smith is the senior energy policy advisor at Civil Society Institute and former executive director of Citizens Action Coalition of Indiana. He can be reached at