Luminant hammers out settlement with Sierra Club on legal issues

Luminant said Dec. 17 that it has finalized an agreement with the Sierra Club under which the Sierra Club will drop multiple pending legal matters against the company.

In return, Luminant will not seek payment from Sierra Club of $6.45m in fees awarded to the company. The settlement was approved on Dec. 17 by the bankruptcy court for Luminant and parent Energy Future Holdings, which have been in Chapter 11 protection since earlier this year.

A federal judge determined in August that a Sierra Club citizen lawsuit against Luminant was “frivolous, unreasonable” and “groundless” and ordered Sierra Club to pay Luminant $6.45m in legal fees and costs. This followed a February 2014 trial that resulted in a complete victory for Luminant on Sierra Club’s claims that Luminant violated state and federal laws at its coal-fired Big Brown Power Plant. The federal court denied all relief Sierra Club requested. Importantly, said Luminant, this settlement does not affect in any way the judge’s fee order or his original judgment in favor of Luminant, which will stand as legal precedent.

Luminant said it is proud of its environmental record, which, among diverse achievements, includes investments of more than $1.6bn in environmental control projects since 2009.

“Final resolution of these legal matters on terms that are highly favorable to Luminant serves as a compelling reminder that this is about our dedicated andmission-focused people, who have an unwavering commitment to operating safely and in compliance with state and federal laws,” said Mac McFarland, Luminant’s chief executive officer. “To the extent that these baseless lawsuits and claims called this commitment into question, we are pleased that any doubt has now been clearly erased.”

As a part of the agreement, the Sierra Club will:

  • Drop its appeal of the February judgment and the August fee award in Luminant’s favor in the Big Brown case.
  • Dismiss a companion case filed in 2010 that alleges similar claims at Luminant’s coal-fired Martin Lake Power Plant.
  • Withdraw Notices of Intent to Sue issued in 2010, 2011 and 2012 that allege similar claims at Luminant’s coal-fired Monticello and Sandow 4 power plants.
  • Strictly limit the scope under which it will seek court approval to intervene in a pending lawsuit brought against Luminant by the U.S. Department of Justice, acting on behalf of the U.S. Environmental Protection Agency, alleging so-called “New Source Review” violations.
  • Withdraw, and cause its lawyers, the Environmental Integrity Project, to withdraw Freedom of Information Act requests seeking EPA disclosure of certain of Luminant’s confidential business information.
  • Withdraw from a petition seeking EPA’s objection to Luminant’s Title V federal air permits at Big Brown, Martin Lake and Monticello power plants and from further participation in a related “timing” lawsuit seeking to compel EPA action on the petition.
  • Provide for a general release of, and covenant not to sue or fund lawsuits for, all claims against Luminant and its affiliates based on any conduct occurring through Dec. 31, 2014.

Said Luminant: “Through this unprecedented and sweeping agreement in Luminant’s favor, Sierra Club will voluntarily end years of litigation and other legal disputes it instigated as part of its campaign against Luminant’s coal plants. The company is pleased it will no longer have to devote time and resources to defending against these baseless claims.”

Luminant is a competitive power generation business, including mining, wholesale marketing and trading, and development operations. Luminant has more than 15,400 MW of generation in Texas, including 2,300 MW fueled by nuclear power and 8,000 MW fueled by coal. The company is also a large purchaser of wind-generated electricity.

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.