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Published: Tuesday, 6/9/2009

Group threatens to scrap coke plant

BY TOM HENRY
BLADE STAFF WRITER

FDS Coke Plant LLC could be on the verge of scrapping its plans for a coking facility and co-generation power plant on the East Toledo-Oregon border.

The project, one of Ohio's largest, carries an estimated price tag of $800 million to $1 billion. The consortium that put it together has promised 150 blue-collar jobs with average salaries of $45,000, along with 1,500 to 2,000 temporary construction jobs.

But five years after the original permit for the coking portion was issued by the Ohio Environmental Protection Agency, no construction has begun.

Lance Traves, FDS project manager and environmental consultant, yesterday issued what was effectively an ultimatum to the Environmental Review Appeals Commission, a state board empowered to overturn Ohio EPA decisions.

He said the FDS board of directors wants the state board to finalize a protective order for the project's contractors by June 26 and at least schedule a future hearing on outstanding permit issues by then.

Mary Oxley, executive secretary for that state commission, told The Blade she does not expect it to act on either of those requests by then.

FDS has set June 26 as its target date because that is when it would be required to make a $200,000 payment to the Midwest Independent System Operator Inc., the operator of the regional power grid, for electricity that the co-generation power plant would supply.

The holdup centers around a joint appeal filed by the village of Harbor View and the Sierra Club.

The FDS board has run out of patience, Mr. Traves said.

"We're still in the weeds. We're still dealing with procedural issues," he said. "If the project does not move forward in ERAC within 30 days, the project will be dead in Ohio."

Both sides engaged in finger-pointing yesterday, with FDS accusing the two litigants of dragging out the appeals process and the latter accusing FDS of doing the same.

"One hundred percent of the delays have been the result of their bad-faith discussions," Dennis Muchnicki, Sierra Club attorney, said. "I don't care what they [FDS] do. He's not going to bully me either way."

FDS is seeking a protective order for all of its contractors. One of them in particular, Uhde Corp. of America, has expressed concerns about disclosing what it perceives as proprietary information, Mr. Traves said.

Uhde, a wholly owned subsidiary of ThyssenKrupp Technologies of Germany, was contracted to oversee the project's heat-recovery operations.

Lawyers have been arguing over the type of information that can be withheld or redacted from public records. The appeal centers around two issues.

One focuses on whether current and past Ohio EPA directors Chris Korleski and Joe Koncelik had the authority to modify the permit before the state appeals board had issued a ruling.

The other challenges the validity of the permit itself, given that FDS did not break ground within the specified 18-month time frame or the one-year extension that was granted before that expired.

FDS contends it met that obligation by hiring its first two contractors, and that they did not have to begin construction by a specified time.

Gov. Ted Strickland has wanted the FDS project so badly that he took a political gamble for it.

To the dismay of environmentalists, the governor used a budget rider in 2007 so that state legislators could help him quickly rewrite a state law and keep the project on track.

The change gave Ohio Environmental Protection Agency directors unprecedented power to modify permits while they are still under appeal.

Contact Tom Henry at:

thenry@theblade.com

or 419-724-6079.



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