Sunflower Electric Power Corp.’s proposed 895-MW Kansas coal-fired power plant suffered another legal setback last week as a federal district court judge ruled in a lawsuit filed on behalf of environmental group Sierra Club that the U.S. Department of Agriculture (USDA) violated federal law by providing approval and financial assistance to the project without environmental review and public involvement.

The decision was filed under seal by Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia and announced on March 29. The Sierra Club and environmental law group EarthJustice had argued that the Rural Utilities Service (RUS), a USDA branch, provided financial support to the project—“including writing off millions of dollars of public debt,” EarthJustice said in a release on Thursday.

“These agreements left the RUS with close oversight of Sunflower’s business operations and required federal approval to proceed with the Holcomb project,” the nonprofit organization said. “Much of Sunflower’s financial struggles stem from overbuilding capacity at their existing unit, Holcomb I, which is a scenario that could be repeated if Holcomb II is constructed since neither Sunflower nor Tri-State, the Colorado partner, has demonstrated the project is needed. The lawsuit argued that, as an essentially federal project, greater environmental review and consideration of alternatives—like greater conservation and renewables—is required.”

Judge Sullivan asked for a briefing, to be completed by mid-June, to determine whether activities should be halted until a full environmental review is conducted.
Sunflower has been facing litigation over plans to build its controversial Holcomb project. The $2.2 billion plant expansion was granted a Prevention of Significant Deterioration air quality construction permit last December by Acting Secretary of the Kansas Department of Health and Environment (DHE) John Mitchell, but that permit is under appeal.

The company had initially filed an application in 2006 to add three 700-MW units to an existing 360-MW plant, but the Kansas DHE 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, as a result of a bipartisan compromise, Sunflower was able to resume the permitting process for the current 895-MW project.

The case is Sierra Club v. U.S. Department of Agriculture et al., U.S. District Court, District of Columbia, No. 1:07-cv01860.

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