Dallas-based Luminant, the electricity generation arm of Energy Future Holdings, got hit with a violation notice from the EPA Friday, accusing it of completing major modifications to its northeast Texas coal-fired plants, Big Brown and Martin Lake, without installing modern pollution control devices.
The notice of violation says the modifications resulted in "significant" increases in the amount of sulfur dioxide and nitrogen oxide the plants release.
Luminant's parent company, Energy Future Holdings, has for the last few years struggled under the weight of the largest leveraged buyout in history, which saddled the company with many billions in debt. Low natural gas prices have generally eroded at the profitability of coal-fired plants. But Energy Future Holdings, at root a big gamble on the sustained high price of natural gas, could scarcely afford to take the hit. It sued the EPA last year over a regulation that would force it to install costly pollution controls like updated scrubbers and bag houses -- removing the very pollutant the agency accuses the plants of emitting more of.
A Luminant spokesperson, Allan Koenig, says the company is evaluating the EPA's claims. "We firmly believe that we have complied with all requirements of the Clean Air Act at these and our other generation facilities. However, until we have completed our review of EPA's specific claims, we feel it would be premature to comment further."
We couldn't get anyone from agency on the phone as of this posting. Ilan Levin of the Environmental Integrity Project, which has sued Luminant in the past, says Congress grandfathered utilities like Luminant from compliance with the Clean Air Act at its passage in 1977. Generators argued that it made little sense to spend millions retrofitting a plant that might have a useful life measuring only in a couple of decades or less. The grandfathering resulted in a rush of power plant construction before the law went into effect, Levin says.
But if a power plant is significantly modified in a way that would increase its generating capability or prolong its life, it loses that status. Utilities are required to pony up and install modern pollution controls. Luminant, the EPA claims, updated its plants but not its pollution controls.
"We firmly believe Luminant made major modifications over the years and they have not gone through the permitting process," Levin says. "And it's not just paperwork. It should result in massive pollution reductions and big pollution control projects. A scrubber can cost many hundreds of millions of dollars, and can take years in construction."