Federal judge rules against utility over Lamar coal plant permitting

A federal court late on Sept. 28 ruled that a coal-fired power plant in Lamar, Colo., violated the Clean Air Act, handing down a setback for the Arkansas River Power Authority’s efforts to keep burning coal, said WildEarth Guardians in an Oct. 2 statement.

“This is a great step forward for clean energy in eastern Colorado,” said Jeremy Nichols, Climate and Energy Program Director for WildEarth Guardians. “For those living in Lamar, it’s time to breathe easier knowing that the Arkansas River Power Authority’s coal-fired power plant will no longer operate illegally.”

The ruling comes nearly three years after WildEarth Guardians, working with several Lamar residents, filed suit against the authority to enforce the Clean Air Act. The suit challenged the utility’s failure to limit toxic air pollution from its 43-MW power plant in Lamar, which in 2007 was converted from natural gas to coal.

The suit targeted an Arkansas River Power Authority (ARPA) refusal to limit mercury and other contaminants using the advanced technology to safeguard public health. In his ruling, Judge David Ebel of the U.S. District Court for the District of Colorado held that the utility violated the Clean Air Act from March 2008 to July 2012 because it failed to construct and operate the plant with the most up to date pollution controls. The judge ordered a trial date to determine the appropriate penalties.

The coal-fired power plant in Lamar has also suffered a number of mechanical setbacks since coming online in 2009, said the environmental group. The facility is currently not in operation, although the authority has indicated it intends to fire it back up as soon as possible, the group added. An ARPA spokesperson confirmed Oct. 3 that the plant is still down for ongoing modifications to the boiler.

“We are surprised and disappointed by the ruling,” said ARPA General Manager Rick Rigel in an Oct. 1 statement. “We have been working with the state on our permitting for the Lamar Repowering Project, and the state has determined that the maximum achievable control technology (MACT) standard does not apply to the plant because it is too small of a facility.”

ARPA noted that WildEarth Guardians had argued in its lawsuit that the Lamar plant was a “major source” of hazardous air pollutants (HAPS) as part of its overall campaign to stop the use of coal for the generation of electricity. The state has determined the Lamar plant is not a “major source,” stating “LUB provided the required data and the Division has determined, through analysis of the LRP’s actual and potential emissions, that the facility has never emitted HAPS at levels triggering the MACT requirements of Section 112 (g).” The state Air Pollution Control Division went on to say, “The Division agrees with LUB that the LRP has never exceeded MACT thresholds and so a MACT determination is not required.”

In light of these findings by the state, the district court found that the Lamar plant is no longer in violation of the Clean Air Act and denied WildEarth Guardians motion for an injunction against operating the plant, ARPA pointed out. The court has ordered the parties to set a date for trial to determine if penalties should be assessed for the previous violations. ARPA said it and the Lamar Utilities Board (LUB) intend to appeal the decision as to whether any violations of the Clean Air Act ever occurred at the Lamar plant.

ARPA permitted the repowering when air rules were in flux

This case involves an electric generating unit (EGU) constructed during the time the application of Section 112 of the Clean Air Act to coal-fired EGUs was in a state of flux, the judge wrote in the Sept. 28 decision. In 2004, the utilities behind the plant resolved to upgrade it and change it from a natural gas-fired plant into a coal-fired one, thus increasing its generating capacity. This plan, known as the Lamar Repowering Project, got a state permit in February 2006.

Because at that time the Delisting Rule and Clean Air Mercury Rule (CAMR) were in effect, the utilities did not have to get a MACT determination in order to obtain a permit or begin construction, and they did not do so. Construction on the project began in July 2006, and it began operating in some capacity in May 2009. “The Project, however, has not yet obtained an operating permit,” the judge wrote.

In July 2009, the EPA notified the utilities that the D.C. Circuit court, in February 2008, had vacated the Delisting Rule and that the project was thus required to comply with CAA Section 112(g). The EPA directed the utilities to contact the state air permitting agency as quickly as possible to obtain a new source MACT determination. The utilities sought from the state, not a MACT determination, but a modification of their construction permit to limit the project’s emissions in order to qualify the project as a minor, rather than a major, source of hazardous air pollutants. After three years of administrative proceedings the state agency on July 25 issued a modified permit identifying the project as a “synthetic minor source of Hazardous Air Pollutants…not subject to a MACT 112(g) determination.”

The utilities, in their summary judgment motion, which was rejected by the judge, requested that the court abstain from resolving Wildearth’s CAA claim because this case presents “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case,” or because federal consideration of this case “would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.”

ARPA owns the Lamar Repowering Project and contracts with Lamar Utilities Board (LUB) and Lamar Light and Power to operate the plant. 

The authority’s website said recent testing of the boiler at the plant resulted in a significant reduction in emission levels. “The Preliminary Testing and boiler tuning were authorized in a Compliance Order on Consent (COC) issued to ARPA/LUB by the State Air Pollution Control Division in April of 2011. The testing resulted in the boiler operating within compliance at a reduced load; however, even though it operated within compliance for all emissions at certain points during the testing, it did not do so in a sustained manner,” ARPA said.

As a result, the plant was taken off-line in mid-November of 2011 per the requirements of the COC. The boiler manufacturer, Babcock and Wilcox, is currently analyzing the test data captured during the testing in order to identify and implement additional boiler modifications necessary for the boiler to operate in compliance. “It is anticipated that the modifications which are expected to be fully implemented by late summer or early fall of 2012, will result in the plant meeting all its regulatory requirements,” ARPA said.

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.