Posted by: Lawyer Sanders | September 25, 2008

Lawyer Sanders says Kentucky Court of Appeals reverses lower court’s denial of an air permit to Thoroughbred Generating Company’s coal-fired electric generating plant in Muhlenberg County.

The Kentucky Court of Appeals issued a decision reversing the Franklin Circuit Court’s decision to deny Thoroughbred Generating Company’s air permit to build a coal-fired electric generating facility in Muhlenberg County.  Franklin Circuit Judge Thomas Wingate had overruled the former Secretary of the Natural Resources Cabinet’s decision to award an air permit to the company.  In a relatively short opinion that will not be published, the appellate panel voted 3-0 to allow the new power plant to move forward.   The 17-page unpublished opinion is limited in scope to the specific facts of this case and should not be interpreted as controlling guidance on PSD issues for other plants.  

The appellate panel ruled on three specific issues pertaining to Kentucky’s air permitting process for large sources of air pollution.  First, the appeals panel looked at the state’s requirements for performing a PSD analysis to determine whether the power plant’s pollution output would cause impairment to visibility, soils, and vegetation under 401 KAR 51:017.  The appellate panel noted the agency found that the electric generating plant was going to be built in an area that had previously been stripped mined.  As a result, the agency determined that the potential impact on visibility would be minimal.  The agency also found that the plant’s pollution would not impact soils and vegetation that were previously disturbed by strip mining activities.  Under these circumstances, the Court of Appeals held that it was proper for the agency to require only an analysis of impairment from pollution coming from the coal-fired plant.  The appellate panel looked at the plain wording of the state regulation to determine that the agency did not have require a “cumulative analysis” of air pollutants from the plant on the ecosystem, as required by U.S. EPA guidance documents on the (federal) PSD program. 

The second issue before the appellate panel was whether selected air pollution controls for the coal-fired generating plant met thebest available control technology” (BACT) requirements of the Clean Air Act.  Previously, the circuit court had ruled that BACT analyses for SO2 and NOx were deficient.  The appellate panel disagreed and noted that the regulation in question, 401 KAR 51:001, requires the maximum level achievable for the specific source of air pollution.  Here, the utility plant planned to use air pollution controls that removed 98% of its SO2 emissions, which was the best available removal efficiency in the industry.  That standard was good enough to meet BACT requirements for SO2.  The appellate panel also accepted the agency’s finding that the plant met BACT requirements for controlling NOx emissions.  

The appellate panel next looked that whether the plant complied with National Ambient Air Quality Standards (NAAQS).  At the circuit court level, the judge ruled that the Cabinet had failed to take into consideration emissions from a diesel-power generator while doing its NAAQS analysis.   The circuit court’s finding on this point is rather odd because the Hearing Officer specifically found that the diesel generator was only to be used in emergencies.  Ignoring the specific finding of the Hearing Officer, the circuit court ruled that emissions from this generator must be taken into consideration for NAAQS requirements.  The appellate panel reversed the circuit court’s ruling on this issue, holding that the circuit court was bound by the agency’s findings, if they were supported by substantial evidence. 

Last, the appellate panel looked at the PSD program’s public notice requirements.  The circuit court held that the public notice for the Thoroughbred permit was defective because notice of the permit was only published in the county where the plant was going to be built.  The lower court disagreed with this approach because once the plant was built it would consume all of the SO2 increments in the geographical region for many decades.  In effect, the lack of available SO2 increments would close the door to further industrial development in a much larger affected area of the state.  Thus, the circuit court would have required public notice be published in all counties affected by the operation of the coal-fired electric generating plant.  The Court of Appeals reversed, finding that the regulation only required notice be given in the court where the plant was built.  

Barring a motion for rehearing or reconsideration, parties have 30 days from the date of the Opinion to move the Kentucky Supreme Court to accept discretionary review of the case.

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