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Luminant Sued by EPA Over Texas Clean Air Violation Claims

Aug. 17 (Bloomberg) -- Luminant Generation Co., the largest power generator in Texas, was sued by the U.S. Environmental Protection Agency over air-pollution standards for two power plants.

The enforcement action, which was filed under seal in federal court in Dallas, follows two earlier EPA notices of violations of the U.S. Clean Air Act by the Big Brown plant in Freestone County and the Martin Lake plant, located in Rusk and Panola counties.

Energy Future Holdings Corp., Luminant’s closely held parent company, disclosed the EPA violation notices in its Aug. 2 regulatory filing.

“We are in the process of evaluating the allegations outlined in the suit, but we firmly believe that we have complied with all requirements of the Clean Air Act for the Big Brown and Martin Lake power plants,” Meranda Cohn, a spokeswoman for Luminant, said in an e-mailed statement.

Stacy Kika, an EPA spokeswoman, referred questions to the Justice Department. Wyn Hornbuckle, a U.S. Justice Department spokesman, declined to comment.

Energy Future, based in Dallas, has asked the U.S. Court of Appeals in New Orleans to review both EPA notices, which allege the pair of coal-burning plants failed to obtain certain permits, according to company filings.

Pollution Controls

“While dozens of other utilities nationwide are investing in clean energy, installing modern pollution controls to reduce pollution and retire aging coal plants, Luminant stands out as one of the nation’s very worst actors,” Nia Martin-Robinson, a spokeswoman for the Sierra Club’s Beyond Coal campaign in Texas, said in a statement. “It burns the dirtiest possible coal -- known as lignite -- and has repeatedly refused to install modern pollution controls.”

Energy Future was formed in 2007 when investors led by Kohlberg Kravis Roberts & Co., TPG and Goldman Sachs Capital Partners bought TXU Corp. and took it private.

Energy Future said Aug. 2 that it’s in talks with creditors and is evaluating changes to its capital structure that include a voluntarily filing for Chapter 11 bankruptcy for some or all of the company, excluding power line-unit Oncor Electric Delivery.

Energy Future’s total debt was $43.55 billion at the end of June, according to a filing.

The case is U.S. v. Luminant Generation Co., 3:13-3236, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporters on this story: Laurel Calkins in Houston at laurel@calkins.us.com; Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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