Proving the need for new infrastructure construction for energy purchases has become more complicated for utilities. State commissions reserve the right to revisit rate-base investments after the...
AGs vs. Utilities
State attorneys general target energy policy issues.
who cite environmental concerns to justify delays for construction projects that would expand infrastructure. In 2007, the California AG delayed ConocoPhillips’ expansion of its Rodeo oil refinery until the company agreed to three things to offset its increased emissions: 1) fund more than $10 million in environmental projects; 2) close down another part of the refinery; and 3) audit its facilities for future emissions reductions. The AG took similar action against Los Angeles over the expansion of port facilities, against San Diego over its proposal to expand its airport, and against Stockton over its plan to revitalize its downtown commercial district.
Natural gas pipelines and liquefied natural gas terminals have been prominent targets. After almost a decade of litigation, the Connecticut AG blocked the construction of the federally-approved Islander East natural gas pipeline that would link Long Island to Canadian natural gas sources, asserting the project violated Connecticut environmental standards. Three LNG terminal projects (two of which were federally-approved) are the subject of AG lawsuits: the Broadwater terminal on Long Island has been delayed by Connecticut, the Providence Fields Point terminal by Rhode Island, and the Oregon AG has filed an appeal with FERC to block construction of an LNG terminal on the Columbia River.
Coal-fired generation plant projects also are of particular interest to AGs. In February 2008, the New York AG settled a suit alleging Rochester Gas and Electric had expanded its 260-MW coal-fired plant in New York without installing adequate pollution controls. The settlement requires that, instead of installing such controls, the plant be closed and replaced by a natural gas plant. In Illinois, the AG’s office drafted legislation passed in January requiring utility companies to obtain their power from clean-coal plants. In October 2007, the Kansas AG said the state Department of Health and Environment had the authority to declare greenhouse gases a public health hazard, allowing the department to deny permits for construction of a $3.6 billion coal-fired plant. Kansas recently moved to dismiss a challenge by utility companies to the department’s denial of the construction permits. AGs’ interests in infrastructure also extends to proposed power plants outside their states, as eight AGs have lobbied South Carolina to deny construction permits for a $1 billion coal-fired plant on the basis that its emissions will exacerbate climate change. For the same reason, the New Jersey AG has filed an appeal with the Third Circuit challenging federal approval of a new coal-fired power plant in Pennsylvania.
Such scrutiny is not limited to coal-fired power plants. Six AGs have lobbied the Nuclear Regulatory Commission for stricter regulations when re-licensing nuclear plants. They claim current regulations do not take into account the risks caused by terrorist threats and natural disasters. In addition, New York and Connecticut have intervened in a matter before the NRC to oppose the relicensing of the Indian Point Nuclear Energy Center in New York. More recently, the Nevada AG has challenged EPA radiation standards in an effort to delay the construction of a nuclear waste storage facility at Yucca Mountain. And Washington and Oregon AGs have sued