Far left, radical environmentalist groups, like WildEarth Guardians, have a long history of disruption and legal harassment, particularly in the western U.S. But lately they have imported their destructive legal games to the eastern plains of Colorado.
Far left, radical environmentalist groups, like WildEarth Guardians, have a long history of disruption and legal harassment, particularly in the western U.S. But lately they have imported their destructive legal games to the eastern plains of Colorado, and in their latest round they are threatening not just local industries, jobs and property, but the entire municipal bond market.
The issue centers around the Lamar Repowering Project, initiated in 2004 by the Arkansas River Power Authority (ARPA) to convert an older natural gas fired power plant to coal, as a means to extend the life of the plant and provide inexpensive energy to local residents. The six member communities of ARPA all took on municipal bond debt – about $146 million – to fund the project.
Unfortunately, all didn’t go as planned. The project ran into problems from the get-go, but the biggest was a boiler that failed to meet emissions standards, due to a manufacturer defect. Before the issue could be resolved with the manufacturer, and a new boiler brought on line to revive the project, WildEarth Guardians sued ARPA over the emissions failure. And, as is the case in so many of their frivolous, predatory lawsuits, the settlement that came out of it resulted in the entire project being shut down.
This not only left the residents of Lamar without a power plant, but also left the ARPA member communities with a truckload of debt. Of course, WildEarth Guardians didn’t offer to help pay for any of it.
With the project abandoned, and all that debt with nothing to show for it, the City of Lamar decided to sue to get out of their portion of the debt burden. A settlement has recently been offered, and accepted by Lamar, but now La Junta, another ARPA member, is balking at the settlement, which would cut the interest on the debt by about half, but also make payments to Lamar to compensate for their loss.
This is what WEG has wrought, and here is what this could ultimately mean for both the ARPA member communities and the municipal bond market; if the settlement is rejected, Lamar’s lawsuit goes back to court. If Lamar loses its case, all the ARPA members will have to pay back their debt at the full interest – not the refinanced rate offered under the settlement.
But if Lamar wins, here is where the real damage occurs. First, La Junta and the remaining ARPA members will be paying more – not only will they be repaying at the higher interest rate, but they will be paying Lamar’s share on top of that.
But the real risk is to the overall bond market. WildEarth Guardians and their ilk are not going away, and their radical program of suing development in the name of “climate justice” is only increasing, and threatens projects all over the country. Inevitably, something like this will happen again. And when it does, you can bet the affected municipality will look to Lamar to see how to proceed. Most local development projects are funded by municipal bonds, and if many more municipalities are able to sue and walk away from their debt, the impact on the bond market could be devastating. The normally safe bonds, which traditionally carry a low interest rate, will suddenly have a much higher risk attached to them. This will drive the interest rates up on these bonds, and make it harder for local governments to secure funding for critical infrastructure or energy projects. And if they do get financing, the higher interest rates will make the projects more expensive, and cost local taxpayers more. This is the last thing smaller towns and cities in rural areas like ours need.
So the damage done by the WEG lawsuit potentially goes far beyond even the current extent. Worst of all, this economic attack on our community by this group is likely at least partially funded by the taxpayers; WEG, and similar groups, cut their teeth by suing the federal government for offering leases for oil and gas drilling, mining, or other development on public lands. Because of the vagaries of the Equal Access to Justice Act, they get their legal fees paid by the American taxpayer any time they prevail or settle one of their suits. This outrageous loophole has allowed them to grow into the environmental bullies they are.
No one can blame La Junta and Lamar for being upset. But both cities need to come to terms with the reality of the situation, and accept the offered settlement as a way to limit and contain the damage. In the meantime, we need to work to curb the excesses of the likes of WEG, so they cannot continue to come into communities like ours, wreak havoc, and they go home while we are left to pick up the pieces. A good place to start would be to find a way to hold them accountable for their part of the Lamar Repowering Project mess.
State Representative Kimmi Lewis represents House District 64 in the Colorado General Assembly.