SPECIAL REPORT: Utah Supreme Court rules for local citizens Future of controversial 8-year-old coal power plant project uncertain

On Friday, December 4, the Utah Supreme Court issued a long-awaited ruling on two cases about NEVCO/Sevier Power’s proposed coal-fired power plant in Sigurd. The unanimous rulings both found that Utah’s Division of Air Quality had unlawfully extended the 2004 air-polluting permit far beyond the original limit of 18 months without following proper procedures — which take 4-5 years to complete. The high court’s decision specifically finds that NEVCO/Sevier Power will have to start the entire permitting process all over again — if they decide to continue at all.

In response to the decision, the Associated Press reports that attorney Fred Finlinson of NEVCO Energy Co. — the Nevada corporation behind the Utah project — said the company is reviewing its options, and may decide, according to Finlinson, that “it’s not worth the expense and labor to earn a state permit again… Opponents will fight the project every step of the way at the Utah Air Quality Division and in court, and that any delay is a loss” for NEVCO.

The case was brought by two Sevier County citizens, Jim Kennon and Dick Cumiskey, who presented their case before the Utah Supreme Court on their own behalf — a difficult feat, even for accomplished lawyers. They presented several points, in hopes that a decision agreeing with any one of them would mean that NEVCO would have to start over. Observers in the room, which included prominent attorneys from around the state, were moved by the obvious sincerity of Kennon and Cumiskey, as well as their clear and pointed arguments.

The two Sevier citizens were set opposite an array of well-paid attorneys from the State of Utah, who had successfully defended the Division of Air Quality’s decision in a lower court. Yet, courtroom observers reported that the Supreme Court’s justices appeared to view the attorneys’ case with suspicion, taking up the time allotted for their presentation by chiding them for their sloppy briefings and presentations, until they apologized to the Court, and were finally allowed to proceed with their arguments.

The Supreme Court found in favor of several of Kennon and Cumiskey’s points, and extended those findings — again, unanimously — in the parallel case brought before the High Court by utahns in the Sierra Club.

The main argument presented by Kennon and Cumiskey was that the air-polluting permit for NEVCO was invalid because 18 months had elapsed without commencement of construction and that the Division of Air Quality’s Executive Secretary had arbitrarily extended the permit without the proper study, hearings, and documentation.

The Supreme Court’s ruling stated that while the Executive Secretary — who dozed off repeatedly during presentations by Sevier citizens at local hearings — did have a legal right to extend the permit, but that DAQ still had to follow the approved process for granting a permit, and that the permit itself must include a deadline by which construction must begin.

Many local citizens and business people have expressed alarm that the controversial NEVCO project — which would produce million of tons of air pollution each year — has been in limbo for years, effectively placing a lid on economic progress in the area. This is cited as one of the key reasons for the 18-month limit to the air pollution permits. For example, several national chains have expressed interest in expanding to the area, and some suspect that the proposed coal-fired power plant was one reason why they did not expand in the area.

The Supreme Court also noted that, since the EPA limits the amounts of pollution Utah industry can produce, extending the permit indefinitely would prevent other businesses from being able to move forward with their own, air-polluting projects. NEVCO reportedly chose Sevier County as its tentative location because it was one of the few areas of Utah that wasn’t already polluted to — or beyond — the legal and healthful limits set by the federal government. Air pollution is proven to cause a wide variety of negative health effects, including increased miscarriage, as well as brain, lung, and heart problems, including death. Doctors believe that coal power pollution is the trigger of over 26,000 deaths in the United States annually.

After NEVCO asked Air Quality to extend their air-polluting permit, the permit was extended a few days later and DAQ personnel said they’d concluded an in-depth review to do so. Yet the lawful requirements of such a review are described in-depth, involving public hearings, studies, and so forth, which take several years to complete. The Supreme Court commented on the review process in this way:

“Kennon and Cumiskey marshaled the only evidence available to support the Board’s findings — a photocopy of a Post-it note briefly recording the date December 19, 2005 and the phrase “contacted RE: eighteen month Tech analysis,” and a letter from the Division indicating that a review had been completed.

“As highlighted by the small amount of evidence Kennon and Cumiskey were able to identify in the record, there was very little evidence to support the Board’s conclusion that the Division’s review satisfied the requirements of Utah rule 307-401-11. A decision is supported by substantial evidence if there is a ‘quantum and quality of relevant evidence that is adequate to convince a reasonable mind to support a conclusion…’

“Here, both the amount and quality of evidence were inadequate. A record limited to a Post-it note indicating that someone was contacted regarding a review is woefully inadequate to convince a reasonable person that a review took place, let alone that the review was sufficiently rigorous to ensure that an approval order implemented the best control technology and would not tie up increment limits unnecessarily.

“The pre-filed testimony of the Secretary and the permit engineer do not adequately bolster the barely existent written record. Instead, the testimony merely rehearsed that a review took place. When pressed as to the details of the review, the testifying parties were unable to provide any specifics, such
as exactly how many or which permits were compared to that issued to the Power Company.

“Therefore, we conclude that the Board’s decision was not supported by substantial evidence and remand to the Division to conduct and document a proper review.”

The Court also found that the Division of Air Quality must consider newer, less polluting technology — Integrated Gasification Combined Cycle, or IGCC (see
http://en.wikipedia.org/wiki/Integrated_gasification_combined_cycle) — as a viable alternative to the cheaper, 50-year old technology NEVCO had proposed to use. DAQ must complete in-depth studies on the technology before issuing another permit, perhaps requiring the new technology’s use in NEVCO’s tentative plant.

The Supreme Court stated that any and all future air-polluting permits will need to have a deadline by which construction must begin. In essence, the court is stating that any project which cannot begin construction within that 18-month time period is not a viable project — they either have the money and wherewithall to build, or they don’t.

Reportedly, NEVCO originally believed there was a potential buyer for a fully-permitted project, and was rushing to get the appropriate permits so they could cash out, and sell the permitted project to the unknown buyer. However, the buyer is said to have backed out years ago. NEVCO has reportedly been unable to find another, and are said to be either unable or unwilling to secure financing to build the project themselves.

Failure to build within the original timeline suggest to some observers that the controversial project is simply not financially viable. Local business analysts have stated their opinion that, with out a buyer, the project could be little more than wishful thinking, and could become a serious boon-doggle for the entire county were it allowed to proceed without sufficient funding to complete construction. The time limit rule, re-inforced by the Utah Supreme Court in Friday’s ruling, appears to support this conclusion.

If the Sigurd project were unable to continue, it would not be alone. Over 100 similar, coal-fired power plant projects — proposed during the Bush administration — have also failed. These failed coal plants have either not been able to get adequate permits, are unable to get financing, or have gone bankrupt before (or partway through) construction. Others have simply been shelved indefinitely.

Among recently failed coal-fired power projects is IPP’s “third unit” power plant in Delta, which had also been granted an extension of its own air-polluting permit at the same time as NEVCO’s extension. The project was cancelled when the major backers and customers for the plant — California utility companies — were prohibited by law from buying more coal-fired electric power in the future. Rather, they were ordered to divert investment funds toward clean energy sources.
One clean energy project to benefit from this investment switch: the Milford wind power project, which started as a school project, and was dedicated a few weeks ago and is now in full operation.

In any case, NEVCO’s proposed project now faces significant hurdles if it is to move forward.

With NEVCO’s attorney conceding that “any delay is a loss” for the controversial project, NEVCO now faces a minimum of a 4-5 year delay on the air-polluting permit along. The project would face multiple public hearings and, perhaps, further legal challenges in the future.

Indeed the company, which recently closed down its offices in Richfield, already faces another, long-delayed court challenge as to whether the county’s Planning Commission followed its own procedures in zoning the tentative project, which is now pending in local courts. Some local observers say that, at least on the face of it, the Planning Commission did not appear to fulfill it’s own lawful requirements in issuing its permission to supercede current zoning restrictions in Sigurd’s farming and residential area. The Sigurd Town Council has stated, after taking a local poll, that it opposes the project.

Water rights for the power plant also remain in doubt, having already faced an earlier law suit from the original sellers of the water rights, alleging that they had not been paid as agreed for the rights. A state hearing on the water rights needed for the project faced a record-breaking number of protests, which included protests from local citizens, farmers, water irrigation companies — and Rocky Mountain Power. A decision is still awaited in that matter.

Even if Sevier Power gets a new air-polluting permit, the company will still need a final land-use approval from the County Commission. In 2008, local voters approved a ballot measure that requires majority voter approval for the land-use permit before a coal-fired power plant can be constructed. The Utah Supreme Court acted quickly to ensure the matter appeared on the ballot, overturning local Judge Lee’s decision to remove it.

Lastly, it appears that any future permits will need to follow more stringent air pollution guidelines set by the Obama administration, which are being added to on an on-going basis. The EPA is now considering whether carbon dioxide produced by coal plants will need to be captured and stored elsewhere, rather than released into the atmosphere. Scientists believe CO2 is a leading cause of global warming.

“We said all along that SPC and the Division of Air Quality were trying to shortchange air quality protections and the health of our citizens. That’s why we fought this so hard,” said Sevier citizen James Kennon on the ruling. “It’s a victory for clean air in Sevier County.”

Dick Cumiskey adds, “This is not a total victory — but for now, it will suffice!”

The Court’s opinion in the Kennon-Cumiskey case may be read here: http://www.utcourts.gov/opinions/supopin/Kennon120409.pdf — in pdf format, and their decision in the Sierra Club case may be found here: http://www.utcourts.gov/opinions/supopin/SierraClub3120409.pdf.

SPECIAL REPORT: Utah Supreme Court rules for local citizens; Future of controversial 8-year-old coal power plant project uncertain

On Friday, December 4, the Utah Supreme Court issued a long-awaited ruling on two cases about NEVCO/Sevier Power’s proposed coal-fired power plant in Sigurd. The unanimous rulings both found that Utah’s Division of Air Quality had unlawfully extended the 2004 air-polluting permit far beyond the original limit of 18 months without following proper procedures — which take 4-5 years to complete. The high court’s decision specifically finds that NEVCO/Sevier Power will have to start the entire permitting process all over again — if they decide to continue at all.

In response to the decision, the Associated Press reports that attorney Fred Finlinson of NEVCO Energy Co. — the Nevada corporation behind the Utah project — said the company is reviewing its options, and may decide, according to Finlinson, that “it’s not worth the expense and labor to earn a state permit again… Opponents will fight the project every step of the way at the Utah Air Quality Division and in court, and that any delay is a loss” for NEVCO.

The case was brought by two Sevier County citizens, Jim Kennon and Dick Cumiskey, who presented their case before the Utah Supreme Court on their own behalf — a difficult feat, even for accomplished lawyers. They presented several points, in hopes that a decision agreeing with any one of them would mean that NEVCO would have to start over. Observers in the room, which included prominent attorneys from around the state, were moved by the obvious sincerity of Kennon and Cumiskey, as well as their clear and pointed arguments.

The two Sevier citizens were set opposite an array of well-paid attorneys from the State of Utah, who had successfully defended the Division of Air Quality’s decision in a lower court. Yet, courtroom observers reported that the Supreme Court’s justices appeared to view the attorneys’ case with suspicion, taking up the time allotted for their presentation by chiding them for their sloppy briefings and presentations, until they apologized to the Court, and were finally allowed to proceed with their arguments.

The Supreme Court found in favor of several of Kennon and Cumiskey’s points, and extended those findings — again, unanimously — in the parallel case brought before the High Court by utahns in the Sierra Club.

The main argument presented by Kennon and Cumiskey was that the air-polluting permit for NEVCO was invalid because 18 months had elapsed without commencement of construction and that the Division of Air Quality’s Executive Secretary had arbitrarily extended the permit without the proper study, hearings, and documentation.

The Supreme Court’s ruling stated that while the Executive Secretary — who dozed off repeatedly during presentations by Sevier citizens at local hearings — did have a legal right to extend the permit, but that DAQ still had to follow the approved process for granting a permit, and that the permit itself must include a deadline by which construction must begin.

Many local citizens and business people have expressed alarm that the controversial NEVCO project — which would produce million of tons of air pollution each year — has been in limbo for years, effectively placing a lid on economic progress in the area. This is cited as one of the key reasons for the 18-month limit to the air pollution permits. For example, several national chains have expressed interest in expanding to the area, and some suspect that the proposed coal-fired power plant was one reason why they did not expand in the area.

The Supreme Court also noted that, since the EPA limits the amounts of pollution Utah industry can produce, extending the permit indefinitely would prevent other businesses from being able to move forward with their own, air-polluting projects. NEVCO reportedly chose Sevier County as its tentative location because it was one of the few areas of Utah that wasn’t already polluted to — or beyond — the legal and healthful limits set by the federal government. Air pollution is proven to cause a wide variety of negative health effects, including increased miscarriage, as well as brain, lung, and heart problems, including death. Doctors believe that coal power pollution is the trigger of over 26,000 deaths in the United States annually.

After NEVCO asked Air Quality to extend their air-polluting permit, the permit was extended a few days later and DAQ personnel said they’d concluded an in-depth review to do so. Yet the lawful requirements of such a review are described in-depth, involving public hearings, studies, and so forth, which take several years to complete. The Supreme Court commented on the review process in this way:

“Kennon and Cumiskey marshaled the only evidence available to support the Board’s findings — a photocopy
of a Post-it note briefly recording the date December 19, 2005 and the phrase “contacted RE: eighteen month Tech analysis,” and a letter from the Division indicating that a review had been completed.

“As highlighted by the small amount of evidence Kennon and Cumiskey were able to identify in the record, there was very little evidence to support the Board’s conclusion that the Division’s review satisfied the requirements of Utah rule 307-401-11. A decision is supported by substantial evidence if there is a ‘quantum and quality of relevant evidence that is adequate to convince a reasonable mind to support a conclusion…’

“Here, both the amount and quality of evidence were inadequate. A record limited to a Post-it note indicating that someone was contacted regarding a review is woefully inadequate to convince a reasonable person that a review took place, let alone that the review was sufficiently rigorous to ensure that an approval order implemented the best control technology and would not tie up increment limits unnecessarily.

“The pre-filed testimony of the Secretary and the permit engineer do not adequately bolster the barely existent written record. Instead, the testimony merely rehearsed that a review took place. When pressed as to the details of the review, the testifying parties were unable to provide any specifics, such as exactly how many or which permits were compared to that issued to the Power Company.

“Therefore, we conclude that the Board’s decision was not supported by substantial evidence and remand to the Division to conduct and document a proper review.”

The Court also found that the Division of Air Quality must consider newer, less polluting technology — Integrated Gasification Combined Cycle, or IGCC (see http://en.wikipedia.org/wiki/Integrated_gasification_combined_cycle) — as a viable alternative to the cheaper, 50-year old technology NEVCO had proposed to use. DAQ must complete in-depth studies on the technology before issuing another permit, perhaps requiring the new technology’s use in NEVCO’s tentative plant.

The Supreme Court stated that any and all future air-polluting permits will need to have a deadline by which construction must begin. In essence, the court is stating that any project which cannot begin construction within that 18-month time period is not a viable project — they either have the money and wherewithall to build, or they don’t.

Reportedly, NEVCO originally believed there was a potential buyer for a fully-permitted project, and was rushing to get the appropriate permits so they could cash out, and sell the permitted project to the unknown buyer. However, the buyer is said to have backed out years ago. NEVCO has reportedly been unable to find another, and are said to be either unable or unwilling to secure financing to build the project themselves.

Failure to build within the original timeline suggest to some observers that the controversial project is simply not financially viable. Local business analysts have stated their opinion that, with out a buyer, the project could be little more than wishful thinking, and could become a serious boon-doggle for the entire county were it allowed to proceed without sufficient funding to complete construction. The time limit rule, re-inforced by the Utah Supreme Court in Friday’s ruling, appears to support this conclusion.

If the Sigurd project were unable to continue, it would not be alone. Over 100 similar, coal-fired power plant projects — proposed during the Bush administration — have also failed. These failed coal plants have either not been able to get adequate permits, are unable to get financing, or have gone bankrupt before (or partway through) construction. Others have simply been shelved indefinitely.

Among recently failed coal-fired power projects is IPP’s “third unit” power plant in Delta, which had also been granted an extension of its own air-polluting permit at the same time as NEVCO’s extension. The project was cancelled when the major backers and customers for the plant — California utility companies — were prohibited by law from buying more coal-fired electric power in the future. Rather, they were ordered to divert investment funds toward clean energy sources. One clean energy project to benefit from this investment switch: the Milford wind power project, which started as a school project, and was dedicated a few weeks ago and is now in full operation.

In any case, NEVCO’s proposed project now faces significant hurdles if it is to move forward.

With NEVCO’s attorney conceding that “any delay is a loss” for the controversial project, NEVCO now faces a minimum of a 4-5 year delay on the air-polluting permit along. The project would face multiple public hearings and, perhaps, further legal challenges in the future.

Indeed the company, which recently closed down its offices in Richfield, already faces another, long-delayed court challenge as to whether the county’s Planning Commission followed its own procedures in zoning the tentative project, which is now pending in local courts. Some local observers say that, at least on the face of it, the Planning Commission did not appear to fulfill it’s own lawful requirements in issuing its permission to supercede current zoning restrictions in Sigurd’s farming and residential area. The Sigurd Town Council has stated, after taking a local poll, that it opposes the project.

Water rights for the power plant also remain in doubt, having already faced an earlier law suit from the original sellers of the water rights, alleging that they had not been paid as agreed for the rights. A state hearing on the water rights needed for the project faced a record-breaking number of protests, which included protests from local citizens, farmers, water irrigation companies — and Rocky Mountain Power. A decision is still awaited in that matter.

Even if Sevier Power gets a new air-polluting permit, the company will still need a final land-use approval from the County Commission. In 2008, local voters approved a ballot measure that requires majority voter approval for the land-use permit before a coal-fired power plant can be constructed. The Utah Supreme Court acted quickly to ensure the matter appeared on the ballot, overturning local Judge Lee’s decision to remove it.

Lastly, it appears that any future permits will need to follow more stringent air pollution guidelines set by the Obama administration, which are being added to on an on-going basis. The EPA is now considering whether carbon dioxide produced by coal plants will need to be captured and stored elsewhere, rather than released into the atmosphere. Scientists believe CO2 is a leading cause of global warming.

“We said all along that SPC and the Division of Air Quality were trying to shortchange air quality protections and the health of our citizens. That’s why we fought this so hard,” said Sevier citizen James Kennon on the ruling. “It’s a victory for clean air in Sevier County.”

Dick Cumiskey adds, “This is not a total victory — but for now, it will suffice!”

The Court’s opinion in the Kennon-Cumiskey case may be read here: http://www.utcourts.gov/opinions/supopin/Kennon120409.pdf — in pdf format, and their decision in the Sierra Club case may be found here: http://www.utcourts.gov/opinions/supopin/SierraClub3120409.pdf.