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Coal-Fired Electric Utility Claims|Sierra Club Poses ‘Irreparable Harm’

SHERMAN, Texas (CN) - Luminant, a coal-fired electric company, sued the U.S. EPA to try to stop it from releasing "confidential business information" that environmentalists could use to try to shut down two plants.

Luminant Generation Company, of Dallas, sued the Environmental Protection Agency Federal Court.

"Through this action, Luminant seeks to protect its confidential information from public disclosure and prevent the substantial and irreparable harm to Luminant that would result from such disclosure by EPA," the 23-page complaint states. "At present, Luminant's confidential information is subject to imminent release to the Sierra Club, who intends to use the information in its campaign to drive away Luminant's customers and shut down Luminant's plans."

A wholly owned subsidiary of Energy Future Holdings, Luminant describes itself in the lawsuit as the "largest competitive electric power generation business in Texas."

Its coal, natural gas and nuclear power plants send more than 18,300 megawatts to the state's power grid, 8,000 megawatts of it derived from coal power.

The confidential information involves Luminant's "electricity generation activities" at its Martin Lake power plant and the Big Brown Steam Electric Station near Fairfield, according to the complaint.

The confidential information includes "commercially sensitive information," such as trade secrets, project descriptions, business plans, performance tests, outage schedules, purchase orders and confidential documents from third parties, the complaint states.

Making this information public will hurt Luminant's ability to compete with other power companies in Texas by enabling its competitors to undercut its bids and potential customers to "unfairly drive down the price in negotiations," according to the complaint.

Luminant claims it has given the EPA access to information about operations at the Martin Lake and Big Brown plants twice before. Both times, Luminant says, it marked any confidential information in the documents in compliance with EPA regulations, and the EPA did not issue a subpoena forcing it to produce additional confidential information.

In 2010, the EPA contacted Luminant about a Freedom of Information Act request from the Sierra Club, which sought more than 330,000 pages of information on Luminant.

In response, Luminant sent the EPA letters identifying which of the requested documents contained trade secrets, and explanations why it needed that information kept confidential, according to the complaint.

Luminant says it released more than 40,000 pages of documents, but the Sierra Club was not satisfied and sued the EPA in February 2011 for another 290,000 pages of documents.

Roughly two-and-a-half years later, the parties entered settlement negotiations and reached an agreement that was signed in October 2013 by U.S. District Judge Maria-Elena James in San Francisco.

Among other things, the agreement allowed the Sierra Club to submit a narrowed records request for documents that were included in a package that the EPA had prepared for the Department of Justice. It required the EPA to confirm with Luminant whether any of the requested documents contained confidential information, and gave Luminant 15 working days to respond to such substantiation requests.

Luminant claims the Sierra Club wants access to its confidential documents so the group can reveal its trade secrets and shut down its coal-fired plants.

"Sierra Club's efforts to obtain Luminant's documents are part of its 'Beyond Coal' and 'Beyond TXU' campaigns, the goals of which are to shut down coal power plants nationwide and in particular Luminant's coal plants in Texas," the complaint states.

The Sierra Club has filed other lawsuits against Luminant and sought to intervene in litigation against it to obtain its confidential documents and publicize them, but judges have consistently shot the group down, according to the complaint.

"Sierra Club is attempting to improperly utilize FOIA to, among other things, circumvent the civil discovery process to obtain and publicize Luminant's CBI [confidential business information]. Neither FOIA nor EPA's administrative process is the appropriate forum to determine whether and to what extent Sierra Club may access the confidential information for use in civil litigation," the complaint states.

Luminant claims the EPA failed to protect its trade secrets by handing over documents to David Schlissel, one of Sierra Club's paid consultants, as part of the group's revised request, without first informing Luminant.

At the agency's request, Schlissel reviewed the documents and opined that Luminant's confidentiality designation was unsubstantiated and that the information should be given to the Sierra Club, according to the complaint.

Luminant claims the EPA "improperly relied on Mr. Schlissel's personal opinion" and denied its confidentiality claims to all but four documents, which got a one-year confidentiality treatment.

Though Luminant asked to see Schlissel's opinion, the EPA refuses to give it a copy or "share any information concerning his findings," the complaint states.

Luminant says it was forced to sue the EPA to prevent the Sierra Club from seeing and publishing its confidential documents.

It seeks declaratory judgment that the EPA violated the Freedom of Information Act, the Administrative Procedures Act and the Trade Secrets Act, a court order vacating the EPA's denial of its confidentiality treatment and an injunction preventing the EPA from releasing its confidential documents.

Luminant is represented by Michael L. Raff with Gibson, Dunn & Crutcher of Dallas and Daniel Jude Kelly, associate general counsel for Energy Future Holdings Corp.

Emails seeking comment from Kevin Miller with the EPA's office of general counsel were not returned by the end of business hours Friday.

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