Medina County Courthouse

Thursday, December 09, 2010

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

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.

(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.

Jack A. Van Kley, 614.431.8900, for the city of Monroe.

Samuel Peterson, 614.466.8746, for the Ohio Power Siting Board.

M. Howard Petricoff, 614.464.6414, for Middletown Coke Company

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