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Challenge to We Energies permit denied

We Energies on Friday cleared one of several regulatory hurdles in its quest to build a $2.15 billion power plant in Oak Creek.

The utility called last week’s Dane Circuit Court decision a “significant step forward” for the embattled project. The environmental group that lost in the ruling, meanwhile, said the judgment was a “minor setback.”

Judge John C. Albert threw out a challenge to the state Department of Natural Resources’ Chapter 30 permit allowing We Energies to build an enormous intake-outtake pipe in Lake Michigan, as well as build on nearby wetlands, expand a dock and perform work on the shoreline.

The judge determined that the challenge, filed by the Sierra Club and S.C. Johnson & Sons Inc., Racine, didn’t meet technical criteria, pre-empting any ruling on the environmental questions raised in the suit.

“This is a significant step forward,” said Thad Nation, spokesman for We Energies. “At this point, this legal challenge is dead. They didn’t follow the rules.”

Bruce Nilles, Midwest representative for the Sierra Club, said lawyers for the environmental organization and S.C. Johnson were “still assessing legal options.” The technical nature of the ruling prevents the groups from resubmitting their challenge, but they could appeal Friday’s decision, he said.

Under review

Still, Nilles said the decision marks a “minor setback” for environmental groups and S.C. Johnson, which have filed several lawsuits seeking to kill the largest construction project in state history.

On March 30, the state Supreme Court will hear oral arguments on perhaps the most important lawsuit involving the project. The court will decide an appeal by We Energies and the state Public Service Commission seeking to overturn a December Dane County court ruling nullifying PSC approval for the project.

The utility is also fighting legal challenges to the proposed plant’s air permit and another state permit allowing We Energies to operate the Lake Michigan intake-outtake valve. The U.S. Army Corps of Engineers also has yet to weigh in on the project, and the corps’ assessment of various environmental questions could also be appealed.

On March 30, the state Supreme Court will hear oral arguments on a court ruling nullifying PSC approval for We Energies’ $2.15 billion Oak Creek power plant.

“A setback in one proceeding is certainly far from a green light for the project to go forward,” Nilles said.

We Energies is staring down a series of quickly approaching deadlines. The utility needs to start construction by July or else its contract with the project’s builder, Bechtel Construction Co., will expire, Nation said.

If the contract lapses, We Energies would have to reopen negotiations, driving the price tag at least $260 million higher because of increases in inflation and construction materials since Bechtel inked the deal several years ago, he said.

The utility also faces a “use-it-or-lose-it” scenario with the DNR air permit, which runs out this summer, Nation said.

And the PSC’s initial approval required We Energies to begin operation of the first plant in summer 2009. Coal plants typically take 50 months to build, meaning Bechtel would have to start moving dirt this summer, he said.

“We’re facing down not just a contract deadline but operation deadlines as well,” Nation said.

If continuing legal battles stall the project beyond this summer, We Energies could be forced to restart its application process, he said.

Jeremy Harrell can be reached at 608-260-8570 or by email.

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