The bankruptcy court for Edison Mission Energy and its Midwest Generation affiliate on Nov. 13 cleared the Sierra Club to pursue a clean-air complaint against Midwest Generation at the Illinois Pollution Control Board.
When Edison Mission Energy and Midwest Gen sought bankruptcy protection in December 2012, the court imposed an automatic stay on all outside litigation against the bankrupt companies. That includes a complaint over coal-fired emissions that the Sierra Club had filed with the board just before the bankruptcy filing.
Recently, the Sierra Club asked the U.S. Bankrupty Court for the Northern District of Illinois to lift the stay so that it could again pursue its complaint at the board. Edison Mission Energy and the Midwest Gen coal plants are due to be sold to NRG Energy (NYSE: NRG). The Sierra Club said that once the bankruptcy was over and the plants belonged to NRG, it would pursue the complaint anyway, so allowing it to pursue the matter now is not a major issue.
Midwest Gen argued that the board case would be an unneeded and expensive distraction as it tries to wrap up the bankruptcy case and get the sale to NRG closed.
The complaint is over alleged clean-air violations at four Midwest Gen coal-fired plants; Waukegan, Joliet, Powerton and Will County. The complaint alleges that the SO2 emissions from these plants have violated and will continue to violate Illinois law by emitting SO2 at levels that would cause violations of the EPA SO2 limit and, therefore, to cause or threaten cause “air pollution” as defined and prohibited by Illinois law.
The bankruptcy court in the Nov. 13 decision said that one test it had to consider is whether there is a good chance that the Sierra Club will prevail on the merits of its complaint, and that in this case the club does have that chance at the board. The court also said that the alleged environmental damage currently being caused by the coal plants outweighs any issues this complaint will cause for Midwest Gen and its bankruptcy case.