After nearly 15 years of successive extensions granted by the Wyoming Department of Environmental Quality (DEQ), a Colorado developer still holds a permit to build the Two Elk coal-fired power plant in northeast Wyoming, despite the fact that no power plant has been built, and there’s been minimal progress in construction, financing or a contract to connect it to the grid.
On Thursday, the Sierra Club and the Sheridan-based landowner advocacy organization Powder River Basin Resource Council formally petitioned Wyoming DEQ’s governing body, the Wyoming Environmental Quality Council, to review the status of that air quality permit.
While Wyoming DEQ does not permit the construction of such facilities, it does have authority to grant air quality permits in Wyoming, which set the parameters for how much pollution can be emitted from a stationary facility.
The petitioners state that the Greenwood Village, Colo.-based North American Power Group, “has not carried out any physical on-site construction activities … since it poured (a) stack foundation in 2005, but certainly not since it entered into the settlement agreement with the Department in November 2007, over six years ago.”
The permit in question sets parameters for the power plant’s emissions. Such permits are valid for two years, during which time the permittee must begin construction. The idea behind the two-year limit is that emissions technology continuously advances, and an emissions control plan that is two years old should undergo a new assessment of Best Available Control Technology if construction hasn’t commenced.
“It is high time for our environmental agencies to take another look at the Two Elk permit and recognize that it is invalid,” Shannon Anderson of the Powder River Basin Resource Council (PRBRC) said in a press release. “Without adequate enforcement, permit conditions are rendered meaningless, and unfortunately, DEQ’s enforcement of the Two Elk permit has been dismal. It’s time for citizens to step in and for our environmental agencies to step it up.”
The petition requests the Environmental Quality Council (EQC) — a seven-member board of three Democratic and four Republican Wyoming citizens — to hold a public hearing on the matter, and ask Wyoming DEQ and Two Elk to prove the validity of the permit.
In an interview with WyoFile, Wyoming DEQ Air Quality Division administrator Steven Dietrich said the Two Elk developer still holds what he considers to be a valid air quality permit. The permit in question today was issued in 2003.
Dietrich said he has the authority to determine the validity of air quality permits, and he considers the 2003 Two Elk air quality permit as valid based on proof of construction activity. That proof comes in the form of quarterly reports from Two Elk and DEQ’s own regular field inspections of the power plant site, which is located next to Arch Coal’s Black Thunder mine southeast of Wright.
Dietrich indicated to WyoFile that since 2003, “There has been active construction. … It hasn’t been continuous.”
Locals in southern Campbell County say there’s been little to no construction activity at the Two Elk site in 18 years, except for a metal storage building, a concrete slab and some earth work to level out a site for construction.
“Locally, we call the plant ‘No Elk,’” local landowner and PRBRC member L.J. Turner said in a press statement. “It’s been a running joke out here for many years, but unfortunately because of the lax enforcement, our environmental agencies are turning into the real joke. Citizens of Wyoming deserve better than that.”
Neighbors adjoining the site, including rancher Dan Tracy, told WyoFile there hasn’t been any active construction at the site in the past few years.
A recent story by the Gillette News-Record about boom times in Wright, Wyo., owes recent growth in the community to a surge in uranium and oil development, but makes no mention of the Two Elk power plant project, which was supposed to inundate the town with hundreds of workers during construction, and create many permanent jobs in the area.
In 2007, North American Power Group worked out a settlement agreement with Wyoming DEQ that would temporarily hold the 2003 air quality permit as valid, with the agreement that — among other stipulations — the company would submit an application to modify the permit. The new information was supposed to enable Wyoming DEQ to apply a new Best Available Control Technology review, and possibly modify the parameters of allowable emissions from the power plant.
Dietrich said Two Elk submitted the application to modify the permit in July of 2010, but the application was considered incomplete. Wyoming DEQ requested the necessary missing information in August 2010, but so far Two Elk hasn’t supplied the requested information, according to Dietrich.
“So we are not able to call the application complete,” Dietrich said, adding that Wyoming DEQ still considers the 2003 air quality permit to be valid based on the terms of the 2007 settlement agreement and ongoing construction reports.
North American Power Group did not respond to multiple requests by WyoFile on Thursday to discuss Two Elk and permitting matters.
North American Power Group first proposed the 320-megawatt Two Elk power plant 18 years ago with little financing but for two issuances of tax-exempt industrial development bonds — totaling $445 million — approved by Campbell County commissioners and two successive Wyoming governors; Jim Geringer (R) and Dave Freudenthal (D). After California was plagued by “rolling brown-outs” in a supposed electrical generation and transmission capacity crisis in 2001, North American Power Group quickly proposed six more major power plants in Wyoming’s Powder River Basin. But so far, the company hasn’t secured financing, nor has it secured an agreement with electrical transmission carriers to connect any of the proposed power plants to the grid.
It was a loose interpretation of Internal Revenue Service code that granted Two Elk the status of a waste disposal facility in order to qualify for the tax-exempt industrial development bonds. North American Power Group convinced the IRS that because the plant would burn “waste coal” — coal from nearby Powder River Basin coal mines that is exposed in the mining process but not sold to customers because it doesn’t meet quality specifications — that the plant qualified as a waste disposal facility.
In 2011, WyoFile reported that the IRS had conducted an audit of the waste disposal facility classification and revoked the tax-exempt status due to lack of construction on the power plant. North American Power Group officials say that the $445 million remains in escrow. Dietrich said that North American Power Group has asked Wyoming DEQ if it can switch the Two Elk design to burn biomass (wood) instead of coal.
Shannon Anderson, of the PRBRC, said her organization wants the Wyoming EQC to review the validity of the Two Elk air quality permit now because that permit exempts the facility from complying with pending new greenhouse gas emission limits for coal-fired power plants and other major GHG-emitting facilities under consideration at the U.S. Environmental Protection Agency.
“They (the proposed Two Elk power plant) have actually been grandfathered as an existing facility, because there’s an existing permit and it’s (supposedly) under construction,” said Anderson, adding that if the Two Elk power plant is built, it should be forced to comply with the EPA’s pending greenhouse gas emission standards.
For more WyoFile reporting on Two Elk and North American Power Group, read these past stories:
— Two Elk stimulus grant suspended; under review by U.S. Attorney, April 2013
— ‘Stimulus’ for Two Elk; Big checks but no new jobs, September 2011
For the complete catalogue of WyoFile stories on Two Elk, check out our Two Elk archive.
— Dustin Bleizeffer is WyoFile editor-in-chief. You can reach him at (307) 267-3327 or email [email protected]. Follow Dustin on Twitter @DBleizeffer
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