For immediate release: Apr 13, 2011
Posted by: [OUCC]
Contact: Anthony Swinger
Phone: 1-888-441-2494

Substitute natural gas contract: Consumer comments invited, Public field hearings scheduled in West Lafayette, Jasper and Indianapolis

Consumers are invited to comment on the proposed contract between the Indiana Finance Authority (IFA) and Indiana Gasification, LLC, for the production and sale of substitute natural gas. The IFA plans to sell such gas to third parties for the benefit of Indiana retail end use customers to serve as a financial hedge against the risk of high natural gas prices. State law authorizes the IFA to enter into such a contract, while requiring approval by the Indiana Utility Regulatory Commission (IURC). The proposed contract is currently pending before the IURC.

The Indiana Office of Utility Consumer Counselor (OUCC) - the state agency representing consumer interests in all cases before the IURC - is accepting written consumer comments for the case record. The OUCC also encourages consumers to attend any of the IURC's three upcoming public field hearings in this case:

The public comment portion at each field hearing will begin at 6:00 p.m. local time.

An OUCC informational session on the regulatory process and public field hearing procedures will start at 5:30 p.m. each evening.

As authorized by Indiana law, the Indiana Finance Authority (IFA) and Indiana Gasification, LLC (IG) have jointly petitioned the IURC for approval of a 30-year substitute natural gas (SNG) purchase and sale agreement between the IFA and IG. Under the agreement's terms, IG would manufacture pipeline-quality substitute natural gas in Indiana and sell the product to the IFA. In turn, the IFA would sell the SNG to third parties with the net effect of the proceeds and costs of those sales being reflected on retail customers' bills in the form of either a credit or charge.

The IFA and IG are also asking the IURC, if necessary, to order regulated natural gas utilities to enter into management contracts with the IFA in order to render SNG charges and credits on customers' bills, as provided by Indiana law. Indiana Gasification is proposing to build and operate a facility in Spencer County, Indiana that would manufacture SNG through a coal gasification process. The product would be sold by the IFA in the competitive wholesale market and may provide a credit or charge to retail customers. The amount of gas purchased by the IFA would equate to approximately 17 percent of the natural gas purchased and sold directly by Indiana utilities to their retail customers. State law also required the IFA to consult with the Indiana Utility Consumer Counselor before entering into such a contract.

All Indiana natural gas utilities have been named as respondents in this case, with a number of additional parties intervening. The OUCC filed testimony in March addressing the proposed contract, viewing it as analogous to an insurance policy against the risk of high gas prices. It also concluded that the SNG contract satisfies the requirements of Indiana law and would reasonably implement the requirements and objectives of the SNG legislation.

Consumers who wish to submit written comments in this case may send them to the OUCC by mail, fax or e-mail, or through the OUCC's Website:

All written comments should include the consumer's name, mailing address, and a reference to IURC Cause No. 43976. Comments received by April 29, 2011 will be filed with the IURC for inclusion in the case's formal evidentiary record.

For more information, please visit the OUCC Website at www.in.gov/oucc/2649.htm.

 

(IURC Cause No. 43976)

The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities. As a state agency, the OUCC's mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving. To learn more, visit www.IN.gov/OUCC.

 

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