Conservationists Say State Regulators are Allowing Power Plant Developers to Avoid Carbon Fees

By Ted Sickinger

Opponents of a proposed power plantin Umatilla County say state regulators are poised to allow construction of a “road to nowhere” that would allow the plant’s backers to avoid paying millions of dollars in extra fees under a strengthened global warming standard established this spring by Gov. Kate Brown.

The Perennial-Windchaser, proposed by an affiliate of Sumitomo Corp., faces a Sept. 23 deadline to begin construction of the 415-megawatt natural gas fired plant under an approval the Energy Facility Siting Council gave in 2015 and amended in 2019, extending the construction deadline to the current date.

As of today, however, the company does not meet state conditions to start construction by that deadline, which would force it to apply for another extension of its site certificate.

If it does so, however, it would be subject to higher state fees meant to discourage carbon dioxide pollution. Complying with those updated guidelines could cost the company millions, perhaps more than $10 million, conservation groups estimate. The gas plant could become one of the largest stationary sources of global warming pollution in the state.

Conservation groups are crying foul. They say council staff members have reported that the company will be allowed to start “phase 1” of construction, including an access road to the plant.

Breaking the project into phases would allow the company to say it had started the project and, thereby, avoid having to apply for that extension.

The project’s site certificate, essentially the council’s permission to build, does not contemplate the project being constructed in phases. The council has never publicly agreed to such an accommodation.

Such a course appears to be in direct violation of Oregon Administrative Rules governing construction of such energy facilities. And it contradicts the council’s own commitments when it granted the first extension in November 2019.

It is also eerily reminiscent of the Oregon Department of Energy’s cavalier interpretation of state rules and legislative directives in the past, which allowed energy developers to skirt state rules and qualify for millions of dollars in taxpayer subsidies for which they were otherwise ineligible.

It isn’t clear how much the company would save in fees, and Perennial did not respond to calls or emails requesting comment. Todd Cornett, administrator of the siting council’s staff, declined to answer specific questions about the project or staff’s actions this week.

“This undermines Oregon’s goals for curbing climate-changing pollution and it confounds common sense,” said Dan Serres, conservation director at Columbia Riverkeeper. “The council’s staff are suddenly pretending like the pre-construction requirements don’t apply, or apply only when it’s convenient for the developer. That’s just plain wrong. And they are doing it to allow the developer to sidestep Oregon’s carbon mitigation rules.”

Serres and other conservation groups, including Oregon Physicians for Social Responsibility, testified against the maneuver during the public comment period at the siting council’s meeting on Aug. 21, but received no direct response. They also wrote to council and their staff raising objections.

“Perennials attempt to meet the Sept 23rd construction deadline by building a road to nowhere is clearly an attempt to avoid applying for another site certificate extension, which would subject Perennial’s gas power plant to Oregon updated and strengthened carbon dioxide standard,” Damon Motz-Storey, healthy climate director for Oregon Physicians for Social Responsibility, told the council. “We urge the council to intervene and prevent staff from allowing Perennial to commence construction without complying with all pre-construction requirements.”

Jennifer Kalez, a spokeswoman for the Oregon Department of Energy, said the opponents’ “position differs from ours.” However, “as staff to the Energy Facility Siting Council, we are taking seriously the concerns Columbia Riverkeeper raised about our implementation of applicable statutes, rule, and conditions of approval related to the Perennial Wind Chaser Station project and are taking the time to carefully review and consider those concerns before responding.”

The governor’s office appeared to be taking a firmer stance Friday.

“Governor Brown expects all energy facilities in Oregon to strictly adhere to the requirements of state law, including the CO2 standard for new power plants,” said Nikki Fisher, a spokeswoman. “Our office has asked ODOE to review this issue to ensure that the facility in question meets the conditions of its site certificate.”

Oregon Administrative Rules clearly state that certificate holders “may not begin construction … or create a clearing on any part of the site until the certificate holder has construction rights on all parts of the site.”

The company has yet to secure those rights. It has not completed wildlife and vegetation surveys on the entire site for the Oregon Department of Fish & Wildlife, required in the council’s 2019 amendment.

JJ Jamieson, a Perennial project manager, told the council in May that those surveys have to take place at a very specific time – in April – and that the company couldn’t get the work done this spring because its contractors didn’t want to take the health risk amid the coronavirus pandemic.

In an email Tuesday responding to a query by Columbia Riverkeeper, an ODFW biologist from the Umatilla District said the state agency had agreed to thecompany’s plan for restoration and biological monitoring for “Phase 1.”

But the company’s site certificate does not mention a “Phase 1.” The council has never discussed or approved a phased approach, and it has no other public meetings scheduled before the Sept. 23 construction deadline.

Perennial also lacks another required permit:an air quality discharge permit from the Department of Environmental Quality. The company’s previous permit expired, and while it reapplied in January, the agency put that process on hold after the company said it might redesign the plant before beginning construction.

Allowing a phased construction approach would also contradict what the council said in granting the amendment to the project’s site certificate in Nov. 2019.

“Even if the Council amends the site certificate to extend the construction commencement date to September 23, 2020, Perennial would not be able to commence facility construction without a valid DEQ permit,” the council order said.

Serres said he only stumbled on the phased approach after inquiring with council staff about whether the company had submitted an application for an extension and was told it wasn’t going to be necessary.

Perennial also has yet to secure a buyer for the plant’s output. That’s not condition required by the state. But it may explain why the company delayed getting started after originally receiving approval in 2015.

Kalez, the energy department spokeswoman, said council staff would be examining the objections raised and responding next week.

Ted Sickinger is a business investigative reporter whose coverage focuses on energy, state economic development, the state Treasury Department and Oregon’s public pension system. He is a reporter for The Oregonian/OregonLive.

This article was published posted on Aug 30, 2020, and updated on Aug 31, 2020 at OregonLIve.

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