Power outage: We Energies' plant expansion must start over

By Rob Golub

Tuesday, November 30, 2004 2:04 AM CST

MADISON - In what can only be characterized as a big win for opponents of the Oak Creek Power Plant expansion, a Dane County Circuit Court ordered Monday that We Energies plans since Nov. 2002 have been based on an "incomplete" application.

The court told the utility it must go back and start over or it doesn't get its power plant expansion.

SC Johnson, the major local employer, and Clean Wisconsin, a Madison environmental group, prevailed against the Public Service Commission and Department of Natural Resources in the court decision. The two state agencies had given We Energies much of what it had sought, permission to expand a power plant to the tune of $2.15 billion using the traditional supercritical pulverized coal technology opposed by so many environmentalists. It would be the largest, most expensive generating facility ever built in Wisconsin.

It was in November of 2002 that We Energies applied to the state Public Service Commission to construct the expansion. After a lengthy review, including public hearings where hundreds of supporters and opponents turned out at the Racine Marriott, the state Public Service Commission finally gave its blessing Nov. 2003.

Now, the court has revoked the construction authority that the state Public Service Commission had granted.

"This is a good day for those who live in the vicinity of the Oak Creek plants, and for everyone in Wisconsin," said Mark Redsten, executive director of Clean Wisconsin.

Pam McGillivray, the Clean Wisconsin attorney on the case, said that as far as she knows, this has never happened before for a major power plant in Wisconsin.

"I think this is unprecedented in that it's going back to the commission to start all over from the beginning," she said.

Labeling the Nov. 2002 application from We Energies "incomplete" and therefore void is a message from the court that public input is important, McGillivray said. The public has a right to review a complete application and to speak on a complete application at public hearings and that's not what happened since the 2002 application was filed before the hearings, she said.

We Energies has not yet decided whether it will appeal the court decision. "We'll be reviewing our legal options over the next few days and determining the best course of action for keeping the project on schedule," said Thad Nation, spokesman for We Energies.

It's possible the court decision could be overturned on appeal. It's also possible We Energies will turn the clock back to Nov. 2002, fill in the gaps in its "incomplete" application, and spend the months or years necessary to reapply for the same power plant expansion in the exact same spot. These realities have power plant opponents mixing some caution with their elation over the Dane County court decision.

"It's not a grand slam in the bottom of the ninth inning that's going to win the game for us but it certainly gives us the upper hand," said Chip Brewer, director of worldwide government relations for SC Johnson.

"We're obviously very disappointed by the court decision. We believe the Public Service Commission interpreted its rules correctly," Nation said, speaking for We Energies. "The Oak Creek expansion is the most studied project in the recent history of the Public Service Commission."

Public Service Commission General Counsel David Gilles said the Commission is disappointed by Judge David Flanagan's decision. "We feel our review process of the application and decision in this case were both thorough and complete," Gilles said in a statement.

Gilles added that the Public Service Commission is considering its options, which could include an appeal to a higher court.

The Dane County Circuit Court order Monday was that the Public Service Commission approval of We Energies plans are vacated and sent back to the Public Service Commission for an approval procedure in compliance with state law. The court held the Nov. 2002 We Energies power plant application to the state was incomplete based on four major points: 1. NO ALTERNATIVE LOCATIONS. Alternative locations for a power plant must be considered before an application for construction can be granted, the court said. But Judge David Flanagan also noted all three of We Energies' proposed alternatives were within the same 1,000 acre parcel at the Oak Creek-Caledonia border. The court wrote in its 54-page decision: "These are not alternative sites or locations; They simply are three different configurations or utilizations of a single site which means that the application does not meet the legal minimum ..."

2. REGULATORY APPROVALS NEEDED FIRST. We Energies needs water permits, construction permits and air permits, among others, to build and operate its plant.

The court held that the Public Service Commission cannot conduct a review of the construction application and grant permission to build until all permits are granted. But We Energies didn't have all its permits when permission was granted. The utility, in fact, still does not have all the necessary permits.

3. NO TRANSMISSION LINE INFORMATION. State law requires that We Energies include specific plans regarding the transmission of electricity in its application. Citing a lack information about cost and location of transmission lines and no information on We Energies agreements with American Transmission Company, the court held the We Energies application was incomplete.

Of the Public Service Commission's approval of We Energies plans, Judge Flanagan wrote: "This determination to approve construction of the largest generating facility in state history without also determining the cost, design, and location of the transmission facilities appears to be unprecedented and is, at best, puzzling."

4. ENERGY PRIORITY LAW IGNORED. Judge Flanagan ruled that under the Wisconsin law, the Public Service Commission is required to consider natural gas, oil, and low-sulfur coal as alternatives to We Energies' plans. He suggests the Public Service Commission conducted no such review.

In effect, this court decision is expected to, at the very least, delay the planned start of construction, set for the first quarter of 2005. Both the Public Service Commission and We Energies have the right to appeal and their announcements on a decision could come in the next few days.

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