Kansas judge takes Sunflower arguments under advisement; Legislature may moot ruling
*Updated 2/23/09 - added link to administrative proceeding opinion.
Oral arguments on a motion filed by Governor Kathleen Sebelius to dismiss a lawsuit filed by Sunflower Electric Power Co. were heard earlier this month in US District Court for the Federal District of Kansas. That ruling may be moot, however, as the Kansas Legislature is considering a bill (SB 265) that would limit the state’s environmental regulators from enforcing air quality standards in excess of federal limits. The legislature also considered a proposal to allow Sunflower to resubmit its request for air quality permits to build the new coal-fired plants. The Republican-led legislature passed three bills previously permitting the construction of the plants to go forward, but the Governor rejected the bills and the legislature failed to override the Governor’s veto.
As reported in an earlier post, Sunflower filed a lawsuit naming the Governor, Lt. Governor Mark Parkinson, and Secretary of the Kansas Department of Health and Environment Rod Bremby, because Sunflower was denied a permit to build two coal-fired power plants allegedly due to concerns about CO2 emissions. Sunflower alleges that neither Kansas nor the United States currently regulates CO2 emissions. Secretary Bremby argues that his decision was based on the US Supreme Court’s 2007 holding in Massachusetts v. EPA, that CO2 was a pollutant and a Kansas attorney general’s opinion giving him broad authority to protect the environment and human health. Judge Eric Melgren has taken the arguments under advisement and plans to rule on the motion at a later date.
Meanwhile, an administrative proceeding concerning the Sunflower plants may be heard by the Kansas Supreme Court. In December, an administrative officer ruled against Sunflower in a non-binding opinion. That opinion now may be headed for the state Supreme Court for a final determination. What will happen if the federal and state courts issue opposing rulings? Perhaps the Legislature will moot this question before we can find out.
Highwood coal-fired power plant suspended in favor of natural gas
In a sign of the changing times, a group of Montana electric utilities for the first time has suspended plans to build a coal-fired power plant in favor of immediate plans to build a natural gas power plant that would emit fewer greenhouse gases. The Southern Montana Electric Generation & Transmission Cooperative (“SME”) early last week announced that it would halt plans to build its $900 million 250-megawatt coal-fired Highwood Generating Station. Instead, construction will continue with a different fuelbase: natural gas. SME has decided to build a 120-megawatt natural gas-fired power plant in addition to a few wind towers in place of the coal-fired plant.
The announcement comes on the heels of several years of opposition to the project on the grounds that the proposed coal-fired plant would emit too much climate changing greenhouse gases and fine particulate. Environmental groups such as the Montana Environmental Information Center and Earthjustice filed multiple lawsuits challenging the permitting of the project, the rezoning of the site where the proposed project is to occur, and even the funding of the project by the federal government.
Tim Gregori, SME’s General Manager and CEO explained that the proposed coal-fired plant had been considerably delayed by the opposition from environmental groups and that there is an “immediate need for base load electric generation” that needs to be addressed. The new plans will ensure that energy will be available in 2011 and also allow SME additional time to sort through the regulatory uncertainty of the new federal leadership.
Environmental groups view SME’s change of fuelbase as directly related to the new administration in Washington. President Obama has pledged to reduce greenhouse gas emissions 80% by the year 2050. This includes ensuring that utilities turn to cleaner and renewable sources of energy like natural gas and wind. Environmental groups are optimistic that other proposed coal fired power plants like Sunflower in Kansas and Desert Rock in New Mexico will soon follow SME’s lead.
Sunflower Electric seeks oral argument on preliminary injunction regarding air quality permit for coal-fired power plant
Sunflower Electric Power Corp. of Kansas has asked the US District Court for the District of Kansas to allow a hearing on its request for a preliminary injunction in Sunflower's $1.5 billion lawsuit against the state. Sunflower filed the lawsuit last month (Sunflower Electric Power Corporation v. Sebelius) claiming that Kansas Department of Health and Environment (“KDHE”) officials had violated Sunflower's rights to equal protection and to conduct interstate commerce by denying Sunflower's application for an air quality permit for two coal-fired plants in western Kansas. The lawsuit seeks $1.5 billion in damages and an injunction to prevent the state from considering carbon dioxide emissions in future proceedings in connection with Sunflower's application for an air quality permit for the coal-fired energy plants.
The Kansas Attorney General has moved to dismiss the case, contending that the federal court lacks jurisdiction because an appeal is pending before the Department of Administration's Office of Administrative Hearings. On July 22, 2008, a state court dismissed an action by Sunflower saying that it did not have jurisdiction to rule on the matter because the Kansas Court of Appeals has exclusive jurisdiction over issues arising from the Kansas Department of Health and Environment's denial of a permit application. The Kansas Supreme Court has postponed the case before it until the Office of Administrative Hearings rules.
Sunflower contends that it is not asking the federal court to rule on issues of state law or to enjoin the state administrative proceedings. Instead, the company is bringing its challenge based on Equal Protection and Interstate Commerce claims under the United States Constitution, alleging that Kansas Health and Environmental Secretary Rod Bremby denied the permit despite his own staff's recommendation to approve the application. Bremby denied the permit on the grounds that the new plants' carbon emissions would contribute to global warming. Sunflower contends that carbon dioxide emissions are not currently regulated in Kansas or the United States and have not been used as a reason to deny an air permit for any other facility in Kansas. Sunflower contends that the case implicates the rights of over 400,000 citizens of Kansas and over 1.5 million citizens of other states whose energy needs would be met in part by electricity generated by the proposed coal-fired plants.
Electric company brings federal lawsuit against Kansas Governor for denial of permit for coal-fired power plant expansion
A Kansas electric power company, Sunflower Electric Power Corporation (“Sunflower Electric”), has sued the state government in federal court, seeking injunctive relief relating to the denial of an air quality permit for its planned power plant expansion. On Monday, November 17, 2008, Sunflower Electric filed a complaint (Sunflower Electric Power Corporation v. Sebelius) in the United States District Court for the District of Kansas, asserting that Kansas Governor Kathleen Sebelius and her administration have violated Sunflower Electric's right to equal protection under the law and are unlawfully prohibiting interstate commerce. Sunflower Electric seeks a Court Order declaring that its rights have been violated and enjoining and vacating the Kansas government’s denial of an air quality permit.
Back in October of 2007, the Kansas Department of Health and Environment (“KDHE”) denied Sunflower’s air quality permit required for construction of new coal-fired electricity generating units. Citing that carbon dioxide emissions from the proposed coal-fired power plant presented a “substantial endangerment to the health of persons or to the environment,” KDHE Secretary Roderick Bremby explained that KDHE had the authority under KSA 65-3012 to deny such permit “[n]otwithstanding a permit applicant’s compliance with all other existing provisions of the Kansas air quality act.” In announcing his decision, Secretary Bremby stated that, “KDHE will work to engage various industries and stakeholders to establish goals for reducing carbon dioxide emissions and strategies to achieve them . . . which is consistent with initiatives underway in states leading the effort to address climate change.”
Sunflower Electric, a consumer-owned, electric distribution cooperative, argues in its action that the KDHE’s purported basis for denying the permit is a “pretext,” and in actuality, KDHE was motivated by the improper purposes of (a) advancing “political aspirations, and (b) prohibiting the exportation of electric energy outside the State of Kansas.” Complaint, p. 2. Several of the allegations point to Secretary Bremby’s testimony at a Kansas legislative hearing where he testified perfunctorily about his analysis that the potential carbon emissions from the power plants constituted a “substantial endangerment.” Complaint, ¶¶ 47-54.
Other allegations mention that in early 2008, the Kansas Legislature passed bills that would require the Secretary to reconsider the denial of the permits and evaluate the permit application without considering in any way the potential carbon dioxide emissions. All three of these bills were vetoed by Governor Sebelius. Complaint, ¶¶ 61-66.
The air permit application is for a power plant expansion at Sunflower Electric’s Holcomb Station in Finney County, Kansas. According to Earl Watkins, president and CEO of Sunflower Electric, the $3.6 billion project would “create 329 jobs earning more than $16 million in annual wages and fully complies with all state and federal requirements while helping to secure our energy independence.”
