by Elizabeth Wydra, Chief Counsel of the Constitutional Accountability Center

This week Sunflower Electric Power Company  took its ongoing battle with the State of Kansas to federal court, filing a lawsuit alleging that state officials violated the Commerce Clause and Sunflower’s equal protection rights when they denied Sunflower’s permit application to build two 700 MW coal-fired power plants in southwestern Kansas.

The lawsuit is the latest episode in a closely-watched battle between the utility and the State’s executive leadership, namely Governor Kathleen Sebelius, Lt. Governor Mark Parkinson, and Secretary of the Department of Health and Environment (KDHE) Rod Bremby.  Last fall, Bremby famously denied Sunflower a permit to build the Holcomb Expansion Project, a series of coal-fired electricity generating units, on the grounds that the project did not call for limits on its CO2 emissions.

In the federal Complaint filed Monday, Sunflower claims that the Kansas state officials were wrong to consider the power plants’ potential CO2 emissions and their impact on Kansans’ public health and environment.  Apparently, Sunflower was not paying attention last year when the Supreme Court issued its Massachusetts v. EPA decision, which held that CO2 emissions are air pollutants under the Clean Air Act, or when EPA’s Environmental Appeals Board issued its ruling last week allowing limits on CO2 emissions in permits issued to coal-fired power plants…but more on that in a moment.

According to Sunflower’s Complaint, staff within the KDHE recommended that the permit be approved.  However, in the wake of Massachusetts v. EPA, Secretary Bremby denied the permit out of concern for the global warming consequences of the proposed Expansion.  Governor Sebelius defended the denial in part by noting that, while Kansans would bear the brunt of the environmental and health problems associated with the plants’ air pollution, much of the electricity generated by the plants would go elsewhere.  In an open letter to Kansans published at the time of the denial, she stated:

Only 15 percent of the energy produced in the remaining two plants would be used in Kansas; the remaining 85 percent would be sold to Colorado and Texas. So Kansans would have 15 percent of the energy and 100 percent of the pollution and environmental impact of 11 million new tons of CO2 each year. That is the equivalent of putting nearly two million new cars on Kansas roads in one year.

Governor Sebelius maintained her decision, despite three attempts by the Kansas state legislature to overturn the denial, each of which she vetoed .  According to AP, Sunflower has not yet exhausted its options within the Kansas state court system to challenge the permit denial, which would require that it go through a yet-uncompleted administrative appeals process.

In the meantime, Sunflower filed its federal lawsuit seeking declaratory and injunctive relief to reverse the permit denial and prevent the State from taking into account potential CO2 emissions from the proposed new plants in any proceedings related to Sunflower’s permit application.  The Complaint alleges that the State has violated Sunflower’s constitutional right to equal protection of the laws by denying the permit, while granting permits to other CO2-emitting facilities “without any articulated standard and without rational or reasonable basis.”  Sunflower is also arguing that the State’s refusal to grant the permit violates the so-called dormant Commerce Clause, a legal principle drawn from the grant of power to Congress under the Commerce Clause to regulate interstate commerce, and which has been used to strike down state regulations that unjustifiably discriminate against or unreasonably burden interstate commerce.  Sunflower’s Complaint accuses Governor Sebelius and her co-defendants of seeking to advance their “personal political aspirations,” and calls their “discriminatory action” against Sunflower “irrational, arbitrary, deliberate, intentional, made in bad faith, and improperly motivated by a desire to prevent the export of electricity out of the State of Kansas.”

While all the facts of this dispute remain to be discovered, one thing is clear at the outset: Sunflower’s lawsuit would have had a better chance of surviving had it been filed two years ago—or at least two weeks ago.  Unfortunately for Sunflower, not only has the U.S. Supreme Court ruled that CO2 emissions are air pollutants under the Clean Air Act, but the EPA’s appeals board has also ruled (just last week) that permits for coal-fired plants may include limits on CO2 emissions.  Perhaps most important, the Obama Administration is sure to enact national regulations—likely including requirements that new coal-fired power plants install Best Available Control Technology (BACT) to limit C02 emissions—aimed at reducing greenhouse gas emissions.  In short, Governor Sebelius’s decision to deny Sunflower’s permit application was not just reasonable in light of the then-recent Massachusetts v. EPA decision—it was prescient.

This state of affairs should leave Sunflower’s constitutional arguments dead on arrival.  The company’s first claim, that the state officials violated its equal protection rights, relies upon a “class of one” argument: Sunflower is not claiming that it is a member of a class suffering unequal treatment based on certain shared characteristics, but rather that it has been singled out and intentionally treated differently from other similarly situated permit applicants.  But “class of one” claims will not succeed if the state officials can offer a rational basis for any difference in treatment.  In this case, the recent Environmental Appeals Board ruling and Massachusetts v. EPA provide what is essentially a court-sanctioned rational basis for Sebelius’s decision that CO2 emissions should be regulated because of environmental and public health dangers.  Moreover, the Environmental Appeals Board ruling last week lays the groundwork for all new coal-fired power plants to eventually face C02 limits.  While Sunflower may be at the head of the class when it comes to facing concerns about C02 emissions at the permitting stage, it certainly is not in a class by itself.

Sunflower’s second claim, that the permit denial violates the dormant Commerce Clause, should similarly be doomed.  None of the laws or regulations relied upon by the state officials to deny the permit discriminates on its face against power plants that intend to sell electricity to out-of-state buyers.  When a law is not facially discriminatory, the courts look to whether the proffered state rationale for its decision—here, the protection of public health and the environment—is a “pretext for economic protectionism.”  Given that the Supreme Court has held that EPA must determine whether greenhouse gas emissions endanger health and welfare, and that EPA’s appeals board ruled just last week that permits for new coal-fired power may include limits on C02 emissions, the Kansas state officials’ decision to consider the health and environmental impact of Sunflower’s proposed plants’ C02 emissions hardly seems like a mere “pretext.”  To the contrary, the trend of the law when it comes to climate change suggests that such considerations may someday—perhaps even someday soon—become a requirement.

The case is Sunflower Electric Power Corporation v Sebelius et. al. (08-2575, filed Nov. 17, 2008) in the U.S. District Court for the District of Kansas. It has been assigned to Judge Eric. F. Melgren, though no hearing date has been set.