Federal Judge Ruling Poses Another Hurdle for Sunflower Coal Plant

A federal district court judge on Tuesday ruled that the Rural Utilities Service (RUS), an arm of the U.S. Department of Agriculture (USDA), must complete an environmental impact study (EIS) before any approvals or other major federal action can be taken on the $2.8 billion expansion at Sunflower Electric Power Corp.’s coal plant in Holcombe, Kansas. The ruling may delay construction of the 875-MW plant, a politically controversial project in the Kansas Legislature.

In his opinion for the U.S. District Court for the District of Columbia, Judge Emmett Sullivan ruled in favor of the Sierra Club, which had alleged the RUS and officials of the USDA had violated the National Environmental Policy Act (NEPA) of 1969 by failing to produce an EIS in connection with its involvement in the Holcombe expansion.

The RUS had in 1980 approved a loan and loan guarantees to Sunflower’s predecessor after an EIS was completed worth $534 million for the construction of the coal plant. According to court documents, the RUS was also involved in reorganizing the company to help it meet its debt repayment obligations.

This week’s ruling follows a March 2011 ruling in which the court granted the Sierra Club’s motion, finding that RUS violated federal law by providing approval and financial assistance to the project without environmental review and public involvement. The court ordered parties involved in the case to submit a supplemental briefing on the appropriate remedy.

“In the instant case, the Court is persuaded that injunctive relief requiring RUS to perform an EIS before any future approvals or consents are given or any other major federal action taken related to the Holcomb Expansion Project, coupled with the federal defendants’ own emphatic conclusion that Sunflower must seek additional approvals from RUS before the Holcomb Expansion Project can proceed, create more than ‘a serious possibility’ that RUS will be able to correct the problem caused by the earlier failure to comply with NEPA,” Judge Sullivan wrote in his decision on Tuesday.

Sunflower spokeswoman Cindy Hertel said the company was analyzing the decision.

Sunflower had initially filed an application in 2006 to add three 700-MW units to an existing 360-MW plant, but the Kansas Department of Health and Environment under then-governor Kathleen Sebelius (D) denied required air-quality permits. Between 2007 and 2009, the Legislature passed four bills to try to force approval, all of which Sebelius vetoed. In 2009, Sebelius’ successor, Mark Parkinson (D), brokered a bipartisan compromise that allowed Sunflower to resume the permitting process for one 895-MW unit. The state’s current governor, Sam Brownback (R), is reportedly a strong backer of the utility’s plans.

Sources: POWERnews, Sunflower, U.S. District Court D.C.