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Federal Judge Rules Against AES in Ash Disposal Case

By on July 28, 2016

SAN JUAN—Federal Judge Francisco Besosa dismissed on Thursday a lawsuit filed by AES-Puerto Rico challenging the legality of ordinances in Humacao and Peñuelas banning the use of coal ash within their borders.

Judge Francisco Besosa (Image of painting via www.prd.uscourts.gov)

Judge Francisco Besosa (Image of painting via www.prd.uscourts.gov)

Besosa dismissed AES-PR’s federal law claims with prejudice, which means the firm is barred from bringing an action on the same claim. However, when it came to Puerto Rico law, Besosa’s dismissal was rendered without prejudice.

Since the early 2000s, AES-PR has sold 454 megawatts of electricity to the Puerto Rico Electric Power Authority (Prepa) derived from its coal fuel plant in Guayama. AES-PR burns coal at the Guayama plant to create electricity, supplying 15% of Puerto Rico’s daily electricity consumption and creating 200,000-250,000 tons of ash each year. The by-products of burning the coal into ash are called coal combustion residuals (“CCRs”), which come in two forms – fly ash and bottom ash – and when mixed with water, they solidify into rock ash.

AES-PR markets its rock ash under the name AGREMAX and sells it to landfills for use in solidifying liquid waste before the liquid waste is deposited into a landfill. AES-PR also sells CCRs as an alternative daily cover for solid waste. Disposal of CCRs not used for these purposes also takes place in sanitary landfills.

According to the ruling, AES-PR has contracts to dispose of CCRs, including Agremax, at El Coqui Landfill in Humacao, Ecosystems Peñuelas Landfill in Peñuelas, and Peñuelas Valley Landfill, LLC.

Humacao and Peñuelas passed ordinances restricting the use of ash derived from coal combustion within their territorial borders.

Besosa in his ruling said that current law allows the cities to approve the ordinances.

AES-PR asserted that its contract with Prepa grants it a property interest to use or dispose of CCRs in Puerto Rico and that the ordinances deprive it of this property interest in violation of the due process clause. The judge, however, said the agreement does not create a property right for AES-PR to dispose of its CCRs because Prepa’s enabling statute does not grant it power to regulate waste disposal.

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