In re Edison Mission Energy

502 B.R. 830, 2013 WL 6092445
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedNovember 19, 2013
DocketNo. 12-49219
StatusPublished
Cited by2 cases

This text of 502 B.R. 830 (In re Edison Mission Energy) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Edison Mission Energy, 502 B.R. 830, 2013 WL 6092445 (Ill. 2013).

Opinion

Amended Memorandum Opinion

(dkt. no. 1283)

JACQUELINE P. COX, Bankruptcy Judge.

This matter is before the Court on the motion of the Sierra Club for entry of an order confirming that the automatic stay is not in effect, or, in the alternative, granting relief from the automatic stay (the “Motion”). See Bankruptcy Case no. 12-49219, dkt. no. 1283. For the reasons that follow, the Motion is Granted.

I. Jurisdiction and Venue

This Court has jurisdiction to hear this matter pursuant to 28 U.S.C § 1334(a). A matter to determine the application of the automatic stay is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(G). Venue is proper pursuant to 28 U.S.C. § 1408.

II. Facts and Background

Edison Mission Energy (“EME”) together with its Debtor and non-Debtor affiliates, including Midwest Generation, LLC (“MWG”), is a leading independent power producing enterprise specializing in developing, operating, and selling energy and capacity from approximately 40 generating facilities in 12 states and the Republic of Turkey. The Debtors have approximately 925 employees and maintain headquarters in Chicago, Illinois and Santa Ana, California. (See Motion for Joint Administration of Lead Case, dkt. no. 717, p. 4.)

The Debtors are indirect subsidiaries and affiliates of non-Debtor Edison International Inc. (“EIX”). (See Declaration of Maria Rigatti, Senior Vice President and Chief Financial Officer of Edison Mission Energy (“Rigatti Declaration”)), dkt. no. 6, p. 2, ¶ 6. EME and its subsidiaries own and operate certain unregulated coal, wind, and gas power generating assets. Id. at ¶ 6. MWG operates several coal-fired plants in Illinois, including the Joliet Generating Station in Joliet; the Powerton Generating Station in Pekin; the Wauke-gan Generating Station in Waukegan; and the Will County Generating Station in Ro-meoville (the “Coal Plants”). Motion, dk. no. 1283, p. 2. ¶ 4.

The Sierra Club is the nation’s oldest and largest grassroots environmental organization. It has approximately 641,000 members, including approximately 23,000 members in Illinois. See Motion, p. 2.

On October 4, 2013, the Sierra Club filed the instant Motion seeking entry of an order either confirming that the automatic stay is not in effect due to Section 362(b)(4)’s police power exception, or, in the alternative, granting relief from the automatic stay to continue a regulatory action pending against MWG before the [833]*833Illinois Pollution Control Board (the “IPCB Proceeding”).

The Sierra Club initiated the IPCB Proceeding on December 15, 2012 by filing a complaint against MWG pursuant, in part, to a provision of the Illinois Environmental Protection Act (the “IEP Act”) that prohibits the discharge or emission of “contaminants” that would cause or tend to cause air pollution (the “Complaint”).2 See 415 ILCS 5/9(a) (2012) which provides as follows:

Sec. 9. Acts prohibited. No Person shall:
(a) Cause or threaten or allow the discharge or emission of any contaminant into the environment in any State so as to cause or tend to cause air pollution in Illinois, either alone or in combination with contaminants from other sources, or so as to violate regulations or standards adopted by the Board under this Act.

Section 9 of the IEP Act encompasses the National Ambient Air Quality Standard (“NAAQS”) for sulfur dioxide which was established by the United States Environmental Protection Agency (“EPA”) to protect human health against excessive sulfur dioxide emissions. The NAAQS sets a maximum sulfur dioxide level of 75 parts per billion (the “EPA sulfur dioxide limit”). See 75 Fed.Reg. 35520, 35546-48 (June 22, 2010).

The IPCB, the policy making body on environmental issues in Illinois, has determined that Section 9 of the IEP Act is violated when predicted sulfur dioxide levels exceed EPA-adopted standards, such as the EPA sulfur dioxide limit. Envt. Prot. Agency v. City of Springfield, No. PCB 70-9, Opinion and Order at 8-9 (Ill. Pollution Control Board May 12, 1971).

To ensure compliance with air quality standards, the IPCB adopted a regulation which provides:

No person shall cause or threaten or allow the discharge or emission of any contaminant into the environment in any State so as, either alone or in combination with contaminants from other sources, to cause or tend to cause air pollution in Illinois, or so as to violate the provisions of this Chapter, or so as to prevent the attainment or maintenance of any applicable ambient air quality standard.

35 Ill. Admin. Code § 201.141. Sulfur dioxide is defined as a “contaminant” within the meaning of this regulation. 35 Ill. Admin. Code § 201.102. The EPA’s sulfur dioxide limit is an “applicable ambient air quality standard.” 75 Fed.Reg. 35520 (June 22, 2010).

The Sierra Club conducted an investigation and concluded that the MWG Coal Plants emit significant amounts of sulfur dioxide into the atmosphere, which chemicals pose a threat to human health and the environment when present in the air in sufficient concentrations.3 Motion, p. 4, ¶ 9. Based upon these findings, the Sierra Club filed the Complaint against MWG with the IPCB. The Sierra Club alleges in the Complaint that the Coal Plants’ sulfur dioxide emissions violate Illinois law by [834]*834emitting sulfur dioxide at levels that would cause violations of the EPA sulfur dioxide limit and therefore, cause or threaten to cause “air pollution” as prohibited by Illinois law. See Motion, dkt. no. 1283, p. 4.

In the Complaint, the Sierra Club requests the imposition of penalties on MWG and an order requiring it to cease violating Illinois EPA regulations, by reducing and limiting sulfur dioxide emissions from its Coal Plants4. The primary relief sought in the IPCB Proceeding is: l).a determination that MWG is violating state environmental laws and 2) entry of an order compelling MWG to comply with state laws by regulating and reducing sulfur dioxide emissions from its Coal Plants. The Sierra Club also seeks an award of civil penalties pursuant to 415 ILCS 5/42, payable to the Environmental Protection Trust Fund. See Motion, dkt. no. 1283, pp. 8-9, ¶¶ 20-22. Pursuant to the statute, the civil penalty is capped at “$50,000 for the violation and an additional civil penalty of not to exceed $10,000 for each day during which the violation continues.”5 415 ILCS 5/42 (2012). The Sierra Club notes in its Motion that it is not seeking to enforce any civil penalty that may be awarded in the IPCB Proceeding. See Motion, p. 10, ¶ 22. Rather, it seeks to pursue its requests for declaratory and injunctive relief and to liquidate the amount of civil penalties.

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502 B.R. 830, 2013 WL 6092445, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-edison-mission-energy-ilnb-2013.