Monroe wins battle in war over Middletown coke plant | Business

MIDDLETOWN (FOX19) - The City of Monroe has won the latest round in the legal fight over the new SunCoke plant being built next to the AK Steel plant on the south end of Middletown near the Monroe border.

The Ohio Supreme Court has ruled in favor of Monroe, which had asked that the Ohio Power Siting Board be required to look at the environmental impact of coke production before agreeing to allow an included power plant to be built. 

The Siting Board has to approve all new power plants built in Ohio.  The board said its authority extended only to the energy production part of the plant, with the remainder left to be regulated by the Ohio EPA.  The court disagreed.

This means the board must reconsider its decision.

The plant, being built for SunCoke under the name Middletown Coke, would supply both power and coke to the AK steel plant.  Coke is a heat-treated form of coal that is used as a chemical in the steel-making progress.  The production of coke takes lots of power, as do other aspects of steelmaking.  That power comes from the coal itself.  The heat produced by the coal will also be used to heat steam which will then rotate turbines for power, assuming the plant is allowed to be built.  This is the way most coal-fired power plants work.

The city of Monroe has been pursuing court and regulatory avenues to prevent the plant from being built as planned, due to concerns about the environmental effects of the plant.

Monroe's Attorney Chris Walker says the ruling is meaningful in affecting the course of action of the OPSB.

In a release, Monroe Mayor Robert Routson said, "Monroe is very pleased that the Supreme Court recognized that the Power Siting Board must consider all impacts relating to energy generation at Middletown Coke. The flaws in the OPSB certificate are just another example of Middletown Coke’s consistent pattern of illegally dodging the laws intended to protect the public from the coke plant’s pollution."

AK Steel had not responded to the ruling by the time this story was written.

Below is an Ohio Supreme Court release with details of the case, and the release from Monroe.


Court Orders Power Siting Board to Review, Rule On Environmental Impact of Butler County Coke Ovens

Board Erred in Denying Jurisdiction Over Ovens as Part of Power Plant

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."

2009-0941.  In re Application of Middletown Coke Co., Slip Opinion No. 2010-Ohio-5725.
Power Siting Board, No. 08-0281-EL-BGN.  Order of the Power Siting Board reversed, and cause remanded.
Pfeifer, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Lundberg Stratton, J., dissents.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-5725.pdf

View oral argument video of this case.

(Dec. 1, 2010) The Supreme Court of Ohio ruled today that the Ohio Power Siting Board (OPSB) erred by denying that it has jurisdiction to review the environmental impact of coke ovens that are part of an electric power “cogeneration station” proposed to be constructed near the Butler County community of Monroe. In a 5-1 decision authored by Justice Judith Ann Lanzinger, the Court reversed a decision of the OPSB approving the siting of the proposed facility without considering the environmental impact of the coke ovens, and remanded the application of the Middletown Coke Company to the siting board for further proceedings to determine whether the proposed facility “represents the minimum adverse environmental impact.”

Under Chapter 4906 of the Ohio Revised Code a “major utility facility” (i.e. a plant designed to produce  at least 50 megawatts of electricity) may not be built without the approval of the OPSB.  In this case, Middletown Coke Company (MCC) filed an application with the OPSB in June 2008 seeking approval to build what it termed a “cogeneration station” on a 250-acre site near the city of Monroe in Butler County. The proposed facility was to consist of 1) ovens that bake coal in order to convert it to metallurgical coke, producing superheated gases in the process; 2) heat recovery steam generators (HRSGs) that filter out pollutants and convert the superheated flue gases emitted by the coke ovens to usable steam; and 3) a steam-powered turbine capable of generating an average of 57 megawatts of electric power.

Before it approves construction of any major utility facility, the siting board must determine that the facility “represents the minimum adverse environmental impact.”  In addition, the siting board’s rules require applicants to provide a detailed explanation of the process used to select the proposed site and a description of alternative sites. In its application, MCC defined the cogeneration station to include only the electricity-producing turbine and related apparatus, such as cooling towers and control equipment.  The application, however, excluded the equipment that burned coal and produced steam -- that is, the coke ovens and heat recovery steam generators.

MCC sought and was granted a waiver from the requirement to develop an alternative-site analysis.  The company reasoned, and the siting board agreed, that the location of the cogeneration station depended on “the location of the coke manufacturing facility, which is not required to undergo a formal site selection study.”  In accordance with this waiver, the application’s description of the site-selection process consisted of one paragraph explaining that the location of the cogeneration station was “constrained by the need to be adjacent to the energy source, which is the coke facility.”  The application did not explain whether the company had considered other sites for the entire project (that is, including the coke facility) or how it settled on the location chosen.

The site selected by MCC borders the city of Monroe and lies a half-mile from the city’s residential neighborhoods and about 1,200 feet from a school. In September 2008, Monroe filed a motion to intervene, opposing the application. It asserted that the source of steam for the project (the coke ovens and heat recovery steam generators) would annually emit over 2,700 tons of air pollutants and up to 160 pounds of mercury. It asked the siting board to review the environmental impact of the entire facility, including the land and facilities used to produce coke, and to consider alternative sites. 

The siting board granted Monroe’s motion to intervene, but disclaimed “jurisdiction over any permits for construction of the coke plant.”  Throughout subsequent proceedings, the OPSB consistently denied that it had jurisdiction to review the environmental impact or location of “the coke plant,” and on that basis disallowed repeated efforts by Monroe to obtain discovery, cross examine MCC’s witnesses or proffer any evidence relating to the coke ovens. After completing an investigation limited exclusively to the steam turbine portion of the project proposal, the siting board granted MCC’s application to construct the facility as proposed.

Monroe exercised its right to appeal the decision of the OPSB to the Supreme Court. 

Writing for the majority in today’s decision, Justice Lanzinger said that in refusing to consider the environmental and other impacts of the coke plant or steam generator portions of the project, and declining even to consider whether there was another feasible location posing less environmental impact, the OPSB disregarded the statute that should have guided its review of the MCC application.

She wrote: “R.C. 4906.01(B)(1) controls the jurisdictional analysis and grants the siting board jurisdiction over ‘[e]lectric generating plant and associated facilities designed for, or capable of, operation at a capacity of fifty megawatts or more.’  ‘Plant’ means ‘the land, buildings, machinery, apparatus, and fixtures employed in carrying on ... a mechanical or other industrial business.’ ... In context, then, the siting board’s jurisdiction extends to land, buildings, and equipment employed in carrying on the business of generating electricity.  ... The siting board, as far as its orders show, never asked whether the contested land and equipment constituted ‘electric generating plant.’  It characterized as ‘the coke plant’ anything used to make coke and then disclaimed jurisdiction, regardless of whether it was also used to generate electricity. The statute, however, grants jurisdiction over ‘electric generating plant’ and does not deny jurisdiction over ‘coke plant.’  The question, then, is whether the contested land and facilities constitute electric generating plant. Concluding that they are ‘part of [a] coke plant’ does not answer that question.   

“The assumption that any given parcel of land or piece of equipment can fit into only one of two categories—coke plant or electric generating plant—is false.  The siting board has not explained why, as a matter of logic, the same land or equipment cannot be both coke plant and electric generating plant. Nor has it cited any legal authority in support of its either-or analysis. Factually, this case demonstrates that the same land and equipment may be used in both processes and thus fit both categories. We reverse the siting board’s jurisdictional ruling. The siting board committed the jurisdictional error early in the proceedings. In addition to affecting the scope of its substantive investigation and analysis, the siting board also limited the scope of discovery, cross-examination, and Monroe’s ability to introduce its own evidence into the record.”

While indicating that it would be inappropriate for the Court to dictate the specific analysis the siting board must undertake on remand regarding the impacts of the non-turbine portions of the facility, Justice Lanzinger suggested the OPSB should evaluate the extent to which the steam generators excluded from its earlier analysis contribute not only to the production of coke but also to the generation of electric power, and should conduct a balancing test between the environmental impacts of the coke ovens and steam generators and the economic and other impacts of alternative locations or technologies.

She concluded: “As a result of its erroneous jurisdictional ruling, the siting board never engaged in the balancing of interests required in this case. ...  It may well be that the best place for this generation facility is less than a mile from Monroe’s homes and schools, but the city is entitled to test that proposition through an effective adversarial proceeding. With a fully developed record and fact-supported explanation, effective judicial review will be possible.”

Justice Lanzinger’s opinion was joined by Justices Paul E. Pfeifer, Maureen O’Connor, Terrence O’Donnell and Robert R. Cupp.

Justice Evelyn Lundberg Stratton dissented, stating that in her view the language in R.C. 4906.01 including “associated facilities” within the definition of an electric generating plant is limited to facilities that are designed for or capable of producing electricity.  “In the instant case, the proposed coke plant is not designed for, nor will it be capable of, producing electricity. It is intended to make coke.” wrote Justice Stratton. “The heat that is used to create steam as fuel for the power plant is merely a waste product of that process.  Thus, I would hold that the proposed coke ovens plant is not an associated facility as defined in R.C. 4906.01(B)(1). ... I believe that the majority’s holding expands the board’s jurisdiction beyond what the General Assembly intended, and it encroaches upon the Ohio EPA’s jurisdiction to regulate coke ovens. Consequently, I would defer to the board’s decision that it has jurisdiction over the proposed power plant, but not the proposed coke plant.  Thus, I would affirm the decision of the Power Siting Board.”    

Chief Justice Eric Brown did not participate in the court’s deliberations or decision in this case.

RELEASE FROM THE CITY OF MONROE:

For Immediate Release

Monroe, Ohio, December 1, 2010

OHIO SUPREME COURT STRIKES DOWN POWER SITING APPROVAL OF MIDDLETOWN COKE PLANT

In a 5-1 decision issued December 1, 2010, the Ohio Supreme Court ruled in favor of the City of Monroe and invalidated the Ohio Power Siting Board (OPSB) certificate authorizing the construction of the Middletown Coke facility. The Court agreed with Monroe’s argument that the OPSB should have considered the environmental effects of all coke plant equipment involved in electricity generation, not just the electric cogeneration equipment. The Court reversed the OPSB’s order, which terminates MCC’s certificate to build the plant, and remanded the case to the OPSB. As a result, further construction of the coke plant is illegal unless and until the OPSB reissues the certificate after following the Court’s guidance.

"Monroe is very pleased that the Supreme Court recognized that the Power Siting Board must consider all impacts relating to energy generation at Middletown Coke," stated Mayor Robert Routson. "The flaws in the OPSB certificate are just another example of Middletown Coke’s consistent pattern of illegally dodging the laws intended to protect the public from the coke plant’s pollution."

This is the second major victory by Monroe in its fight to ensure that Middletown Coke adequately protects public health and the environment. The first victory occurred in response to Monroe’s federal Clean Air Act lawsuit seeking to stop construction of the coke plant until it received the necessary air pollution control permit. In response to that lawsuit, Middletown Coke ceased construction of the coke plant in early 2009 and applied for an air pollution permit under the federal New Source Review program. The New Source Review permit, which was issued in February of 2010, reduced the coke plant’s annual emissions by approximately 20%. The permit reduced sulfur dioxide emissions by 492 tons/year, a 30% reduction. Sulfur dioxide forms fine particles in the atmosphere that cause lung and heart disease and deaths. This is a critical accomplishment, because the concentrations of fine particles in Butler County’s air already exceed EPA’s health standard. This accomplishment will be a major benefit to Monroe’s nearby residential neighborhoods and an elementary school located only 1200 feet away from the coke plant’s facilities.

Today’s Ohio Supreme Court decision interpreted an Ohio law requiring a major utility that produces electricity must obtain an OPSB certificate to ensure that the plant’s operations do not harm the public. Middletown Coke sought to evade these public 2

protections by applying for a certificate covering only the cogeneration equipment that converts heat to steam -- the least harmful equipment in the plant. Most of the plant’s damage to public health will come from its coke oven pollution, which Middletown Coke’s application and OPSB’s certificate completely ignored. Today’s Supreme Court decision reversed the OPSB’s decision to ignore the most harmful aspects of the coke plant’s operations. Middletown Coke has described the cogeneration equipment as essential to the economic viability of the overall facility.

Monroe intervened in the OPSB case, arguing that the OPSB must consider the harmful effects of the entire coke plant—not just the electrical generating equipment—and therefore must evaluate the environmental impact of more than 2,000 tons of pollution that the coke plant would emit each year. The OPSB disagreed and considered only the cogeneration equipment, which it claimed was a "zero-emission facility." The OPSB refused to consider the environmental impacts of the coke-making processes that would generate the steam necessary to produce electricity. As a result, OPSB prevented Monroe from conducting discovery or presenting evidence concerning the impacts of, or alternative sites for, the overall coke plant.

The Supreme Court reversed the OPSB, invalidating the certificate for Middletown Coke. The Supreme Court found that the OPSB relied on a false distinction between "coke plant" and "electrical generating equipment." As a result of that error, the OPSB did not fulfill its legal duty to consider the impacts of the entire electrical generating plant, and unreasonably limited Monroe’s opportunities to develop and present evidence. The Court sent the matter back to the OPSB to reconsider the certificate after properly considering the environmental effects of the coke plant’s other processes that relate to electrical generation.

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