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Issue could play role in bankruptcy case of troubled utility
By John Higgins
and Bob Downing
Beacon Journal staff writers
Published on Tuesday, Jul 22, 2008
Akron and the operator that leases its steam system could be sued by the U.S. Environmental Protection Agency in the next few months, an attorney representing the city told a federal bankruptcy court judge on Monday.
Attorney Steven Bell said he was informed by the U.S. Attorney about six weeks ago that the government will file a civil action on behalf of the U.S. EPA for violations of federal clean-air laws.
The city wants the 240 some creditors in the Akron Thermal bankruptcy case to know about that before they vote on whether to approve the utility's reorganization plan.
''That is coming,'' Bell said of the civil action. ''It is going to happen.''
An attorney representing Akron Thermal told the judge that any talk of an impending civil suit is speculation at this point.
The EPA declined comment on any potential legal action concerning the plant.
''There's really nothing I can tell you,'' said Bill Omohundro, an agency spokesman in the Chicago regional office.
The utility, which serves three Akron hospitals, the University of Akron and government buildings downtown, filed for bankruptcy protection from creditors June 18, 2007, after the city announced it would evict Akron Thermal.
Chief Judge Marilyn Shea-Stonum must decide whether the information provided by Akron Thermal is adequate for creditors to cast an informed vote.
More than half the creditors must approve the plan and they must represent at least two-thirds of the debt.
A confirmation hearing on the plan is set for late August and according to the current schedule creditors should be receiving ballots and the disclosure statement soon.
The EPA question is ''shaping up to be a monumental confirmation issue,'' Shea-Stonum said. She is expected to decide on the adequacy of Akron Thermal's disclosure statement within a week.
Akron Thermal argued in court papers that its disclosure statement ''contains an exhaustive discussion of environmental matters'' and explains why Akron Thermal disagrees with the U.S. EPA's allegation that its coal-fired burner violates clean-air laws.
The EPA sent Akron Thermal a letter dated May 1 rejecting the utility's offer to settle the matter. Akron Thermal responded by asking for copies of any technical reports or information supporting the agency's view and is still waiting for a response, according to the utility's court filings.
Akron Thermal's proposed fixes were estimated to cost $1.8 million.
The city argues that its own expert estimated it would cost $7.8 million to bring the boiler into compliance and civil penalties could exceed $25 million.
The U.S. EPA issued a notice of violation to Akron Thermal in 2005, arguing that Boiler 32 should have been subjected to New Source Review when it was reactivated in 1995 after it was idle in standby mode since 1988.
Akron Thermal maintains that it is not a ''new source'' of emissions and shouldn't be subjected to the tougher air pollution control standards.
New Source Review, a provision of the federal Clean Air Act, was the basis of federal lawsuits filed in 1999 and 2000 against three Ohio utilities in connection with their coal-burning power plants.
The U.S. Justice Department charged that Akron's FirstEnergy Corp, American Electric Power in Columbus and Cinergy Corp. in Cincinnati (now part of Duke Power) plus four other utilities had allegedly made illegal repairs on their plants without installing new anti-pollution equipment.
The New Source Review provision requires that a pollution source install the best pollution controls when a new facility is built or when a major modification that increases air emissions is made.
John Higgins can be reached at 330-996-3792 or jhiggins@thebeaconjournal.com.
Akron and the operator that leases its steam system could be sued by the U.S. Environmental Protection Agency in the next few months, an attorney representing the city told a federal bankruptcy court judge on Monday.
Get the full article here.
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