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FERC's Authority to Restart Mirant Challenged

Who has what authority enters Mirant dispute.

Virginia's Department of Environmental Quality has legally questioned the authority of the Federal Energy Regulatory Commission to grant Mirant the right to restart their Potomac River Generating Station.

"This action puts two government agencies up against one another," said attorney John Britton, of Schnader Harrison Segal & Lewis LLP, representing Alexandria in efforts to close Mirant's Potomac River Plant. DEQ's motion was filed Oct. 11 in the name of Robert G. Burnley, director, VDEQ.

Burnley and the city also drew support from the Fairfax County Board of Supervisors during its Monday meeting. In a letter approved by the board and signed by Board of Supervisors' chairman Gerald E. Connolly as well as Mason District Supervisor Penelope A. Gross, chairman of the Environment Committee, the Fairfax County governing board wrote, "The emissions from this facility affect the entire region's airshed."

The letter also stated, "We remain very concerned with Mirant's recent decision to resume some of their operations at this facility without a complete review and approval of the new modeling from DEQ staff. Reducing air pollution is a top priority for Fairfax County and the other Washington metropolitan jurisdictions."

"Smog and haze not only threatens the health and well being of our residents, but failure to adequately address these pollutants could result in an embargo of federal transportation funds for the region. All of us in the region would feel the impacts of dirtier air, more congestion and declining economic condition," Connolly and Gross wrote.

DEQ'S MOTION is based on four primary assertions:

* The relief requested by the District of Columbia Public Service Commission is impermissible because it would contribute to further significant deterioration of area air quality standards.

* The relief requested would impermissibly strip the director of his ability to meet his duties under Virginia law.

* It is premature for the Commission to take action without first satisfying the requirements of the National Environmental Policy Act.

* The facts alleged and the relief requested appear to be more properly considered within the jurisdiction of the Department of Energy.

Based on these points, Burnley's motion stated, "The Commission may not lawfully undertake the action sought in a manner that complies with the Clean Air Act, Virginia's Air Pollution Control Act, and the National Environmental Policy Act, or that is otherwise consistent with federal and state law."

Burnley noted, "Any relief granted by the Commission in this proceeding must comply with applicable requirements of federal and state environmental laws." Based on this rationale, Burnley cited the following issues to be contested:

* The Commission's authority to order Mirant to operate the plant "in a manner inconsistent with the Federal Clean Air Act."

* The authority to order Mirant to operate the plant without determining whether such action would conform or be inconsistent with Virginia's implementation plan.

*If the Commission's action to order Mirant to operate the plant would prevent the DEQ director from "administering and enforcing the Commonwealth's Air Pollution Control Law."

*Does the Commission have the authority to act on Mirant's behalf "without first satisfying the requirements of the National Environmental Policy Act?"

* Can the Commission act on the "alleged emergency" request of District of Columbia Public Service Commission without providing an opportunity for a hearing?

BURNLEY MAINTAINED that:

* "The Commission has no discretion to issue any order with respect to the generation of electrical power at the Potomac River Plant unless that order complies with the Clean Air Act."

* "Any relief granted by the Commission requiring Mirant to resume operations at the previous levels would be contrary to federal law, as it would result in a violation of the federally mandated National Ambient Air Quality Standards

for these [Alexandria] constituents."

In the final analysis, Burnley asked the Commission to "defer any further action" pending additional analysis by DEQ.

When asked about DEQ's motion, Brian Lee, spokesperson for FERC, stated, "This is a matter before the Commission. For me to comment would not be proper. This is now part of the record of the Commission and will be factored into the decision process. The Commission will make its decision known at that time."