Judge Denies Lamar’s Restraining Order Request Against ARPA & Syncora

Lamar Repowering Project

The City of Lamar and Lamar Utilities Board were denied a request for a temporary restraining order against ARPA, Arkansas River Power Authority and bonding agent, Syncora Guarantee, during a hearing conducted this past Wednesday, October 22. A Senior Judge, Scott Epstein, ruled that the parties will have 90 days to come to some form of agreement following mediation in the matter.

The City of Lamar and the LUB wanted to halt any action by ARPA in the decommissioning of, or selling the Lamar Repowering Project and to prohibit Syncora from withholding their settlement payment of $640,000 to the City of Lamar until after a preliminary injunction could be held. Each of the six ARPA member cities, Lamar, Holly, Springfield, La Junta, Las Animas and Trinidad were offered a settlement payment if they voted to reaffirm their basic, initial contract agreement with ARPA, which Lamar refused to do.

Lamar’s two representatives on the ARPA board of directors cast the only no votes on a resolution to decommission the Light Plant instead of continuing to place it in a cold standby mode. That vote was taken on September 25 of this year.  The Lamar City council voted on October 13 to hire a law firm to represent them and the Lamar Utilities Board to seek their temporary restraining order.

The judge’s decision also allows ARPA to alter their 2015 budget which could lay-off 18 employees from the Light Plant who are directly involved with the operations of the Lamar Repowering Project. The coal-fired plant will continue to be inoperable until at least 2025 based on an earlier court ruling regarding plant air quality emissions and subsequent power purchase agreements to ARPA to maintain customer service to its member communities.  The former boiler from the natural gas plant Lamar used before the conversion to coal cannot be used.  One point of contention in litigation against ARPA is that the contract agreement calls for that power plant to be restored for use by the City of Lamar.

Lamar City Attorney, Garth Nieschburg and one of Lamar’s board representatives to ARPA, said, “The judge will have to appoint a mediator for all interested parties, and that will probably involve the separate citizen’s lawsuit against ARPA.” He and Light Plant Superintendent, Houssin Hourieh, are Lamar’s ARPA representatives.  Hourieh earlier stated that it costs $135,000 a month to maintain the coal-fired plant which has been off line for the past three years.  ARPA has stated through various consulting firms that its electric rates will increase 9% over the next several years if the plant remains in cold standby.

Lamar Mayor, Roger Stagner, attended the Wednesday hearing. He said the city will continue to employ the legal specialists for representation in the mediation, but the judge did not set a date at which he will appoint a mediator.  Stager said he believed that if no agreement could be found for all involved parties, the judge will probably make a ruling on the case.

By Russ Baldwin

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