By the OGJ Online Staff
HOUSTON -- Niagara Mohawk Power Corp. Friday asked a New York state court for a declaratory judgment that NRG Energy Inc., Minneapolis, Minn., is responsible for any pollution control improvements to two coal-fired electricity plants that NRG now owns.
The legal action is the latest fall out from what industry contends is a change in enforcement practices under a tighter interpretation by the US Environmental Protection Agency of the 'new source review' (NSR) provisions of the federal Clean Air Act (CAA). Presently, under orders from the Bush administration, EPA is holding a series of hearings around the country on what can be done to improve NSR rules.
Filed in New York State Supreme Court in Syracuse, the lawsuit arises from Niagara Mohawk's 1999 sale of the C.R. Huntley steam station in Tonawanda and the Dunkirk steam station in Dunkirk to independent generator NRG.
Michael J. Kelleher, vice-president of financial planning, said Niagara Mohawk is asking the court to declare, as set forth in the agreement to sell the plants to NRG, any obligations to improve the plants' emission controls or other equipment would be the legal responsibility of the current owner of the plants, not the former owner.
Shares of Niagara Mohawk fell 10¢/share to $17.36 and NRG's shares were down 11¢/share to $24.49 in early afternoon trading.
In May 2000, the New York State Department of Environmental Conservation charged maintenance work Niagara believed to be routine at the two plants should have been considered major modifications, which would have required stricter control of future emissions under the NSR) provisions of Clean Air Act.
In May 2001, New York's attorney general advised Niagara Mohawk, a unit of Niagara Mohawk Holdings Inc., Syracuse, NY, and NRG of plans to file suit on or after July 16, alleging the plants violate the Clean Air Act.
Niagara Mohawk said past maintenance and repairs at the plants complied with all state and federal requirements in effect when the work was performed. Company officials said all maintenance or repairs to the plants were routine activities exempted from permitting requirements.
"This is a revisionist interpretation of routine maintenance as plant modifications, which simply is not substantiated by the facts," said David H. King, Niagara Mohawk, executive director of environmental affairs.
