LS Power drops plans for Georgia Longleaf Energy coal-fired power plant, citing economy, pollution rules

ATLANTA , December 13, 2011 () – An energy developer will drop its plans to build a coal-fired power plant in Georgia as part of an agreement ending a lawsuit that environmentalists filed targeting one of the company's power plants in Texas, officials said Monday.

The agreement reached Friday requires LS Power Development LLC to impose stricter pollution limits on its Sandy Creek power plant, which is now being tested in Texas. As part of the deal, the company agreed to relinquish its permits to build the Longleaf Energy Plant in southwestern Georgia, LS Power Vice President Mike Vogt said. The company also agreed not to seek permits to build another coal-fired unit at its Plum Point Energy Station in Arkansas for five years.

"This is not just a victory for the individuals and organizations fighting this plant, but also for all Georgians, who are now safe from a major new source of toxic air pollution," Colleen Kiernan, director of the Georgia Chapter of the Sierra Club, said in a statement.

The developer said the estimated $2 billion project in Georgia's Early County had become increasingly unattractive given the state's economic problems and difficult in light of increasingly strict pollution rules proposed by the U.S. Environmental Protection Agency. Environmentalists have fought for years against the power plant, which they said would have become a major new polluter.

"The recession that happened" in 2008 "really cut the demand for electricity in Georgia," Vogt said.

Natural gas prices have dropped significantly since the coal-fired plant was proposed in 2001, Vogt said. The downturn in the economy cut electricity consumption in the state, and the plant's developers did not have long-term commitments from buyers hoping to purchase the energy that the plant would produce. Additionally, the company's proposed coal-fired plant would have faced significant competition.

The Atlanta-based Southern Co. is seeking permission from federal regulators to build a major nuclear power plant near Augusta. A consortium is also hoping to build Plant Washington, another coal-fired unit, near Sandersville.

Last year, a coalition of environmental groups filed challenges against Plant Longleaf and Plant Washington targeting what they called an unprecended wave of new permits for coal-fired power plants at a time when other states are moving toward other fuels.

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