Sierra Club stopped taking Chesapeake Energy gas money

The Kentucky Power unit of American Electric Power (NYSE: AEP) managed to confirm the fact that the Sierra Club took in $26m worth of contributions from natural gas producer Chesapeake Energy (NYSE: CHK) and related parties over the 2007-2010 period, but stopped when it got concerned about hydraulic fracturing.

The money was used to help finance Sierra Club opposition to coal-fired generation, according to documents examined by GenerationHub. This confirms reports from earlier this year, which kicked up something of a fuss at the time, that Chesapeake Energy had been giving money to the Sierra Club.

The Sierra Club is an intervenor in an ongoing case at the Kentucky Public Service Commission where Kentucky Power is seeking approval to install a dry SO2 scrubber on the 800-MW, coal-fired Unit 2 at the Big Sandy power plant. The Sierra Club contends the unit should be shut and alternative supply- and demand-side options be used to make up for that lack of capacity. Kentucky Power during the course of the case asked the Sierra Club for a list of its contributors, which the Sierra Club refused to turn over.

“In Kentucky Power Company’s Requests for Information to Sierra Club, the Company had sought discovery regarding donations made to Sierra Club,” said an April 27 Sierra Club filing at the commission from legal representative Kristin Henry. “Sierra Club objected to this information request for numerous reasons, including that it impinged on the Club’s constitutional rights. During a meet-and-confer call with Mark Overstreet, counsel for Kentucky Power Company, I informed Mr. Overstreet that Sierra Club had been advised by its counsel not to produce any documents in response to the Company’s requests. To avoid a possible Motion for Protective Order or Motion to Compel, Sierra Club offered to submit a declaration stipulating to the fact that it had received donations from entities or individuals associated with Chesapeake Energy. On Friday, April 20, 2012, Mr. Overstreet informed me that this was an acceptable solution.”

Attached to the filing was an April 26 affidavit from Sierra Club official Bruce Nilles. He oversees several conservation priorities for the Sierra Club, including the Beyond Coal Campaign.

“From 2007 through 2010, Sierra Club received more than $26 million in contributions from entities or individuals associated with Chesapeake Energy, a natural gas company,” Nilles wrote. “This money was used to support Sierra Club’s Beyond Coal Campaign. As time progressed, Sierra Club became increasingly concerned about hydraulic fracturing, or ‘fracking,’ a technique where millions of gallons of water, laced with other ingredients (including, often, toxic chemicals) are pumped into rock to release gas deposits. In 2010, Sierra Club stopped accepting donations from entities or individuals associated with Chesapeake Energy. The Sierra Club does not accept funding from any other natural gas company.”

AEP said in April 17 rebuttal testimony in this case that the current plan is to take Unit 2 down in early 2016 for a scrubber tie-in, with the unit to come back up in mid 2016. This assumes the company gets a one-year extension on an April 2015 compliance deadline under the Mercury and Air Toxics Standards (MATS).

Big Sandy consists of two units with a total nominal capacity of 1,078 MW. Big Sandy Unit 1 has a nominal capacity of 275 MW and Big Sandy Unit 2 has a nominal capacity of 800 MW. The units came online in 1963 and 1969, respectively. Kentucky Power anticipates retiring Big Sandy Unit 1 by the end of 2014.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.