Lehigh Anthracite is suing Panther Creek plant for $14.7M
Lehigh Anthracite is currently suing the Panther Creek Power Plant for $14.7 million, alleging that the power plant broke a contract where they agreed to pay for monthly deliveries of waste coal.
Panther Creek operates a coal refuse to energy plant in Nesquehoning. The plant is capable of burning waste produced during the coal mining process.
One source of that waste coal was Lehigh Anthracite, located in Tamaqua.
The coal company is suing the power plant for just over $14.7 million, money they say would have been paid under the contract in exchange for the waste coal.
Just this week, a Carbon County judge denied a request to add the power plant’s parent company, Olympus Power LLC, to the lawsuit. The power plant argued that their contract with the coal company specifically said Olympus couldn’t be sued.
But the suit against Panther Creek moves forward.
Plants like Panther Creek have been praised by local officials, but they face a challenging energy market. Elected officials such as state Sen. John Yudichak, D-Luzerne/Carbon, have fought in Harrisburg to create tax credits for coal refuse to energy plants, because they help clean up the waste coal piles that are known to tower over towns in the coal region.
While they provide an added benefit, waste coal plants must compete on the open market against natural gas and other power plants.
Panther Creek is one of only 18 waste coal plants in the country. Fourteen of those are in Pennsylvania.
In November 2015, the power plant signed a three-year contract with Lehigh Anthracite Inc. to accept waste coal. Under the contract, Panther Creek agreed to accept 25,000 tons of waste coal per month, for roughly $16 per ton. The contract actually continued a similar agreement from 2013.
Panther Creek planned to burn the coal to produce energy that it would sell on the market.
But just a few months after the deal was signed, the price of energy was so low that Panther Creek agreed to lay off 24 workers.
They also notified the coal company in February 2016 that they wouldn’t be able to accept deliveries. In a letter, power plant officials said they were going into an “extended economic outage due to the depressed wholesale energy price.”
In June 2016, the coal company filed suit against the power plant. They are seeking $14.715 million claimed to be owed to them under the contract.
In addition, the coal company is seeking damages for equipment they say was purchased in anticipation of transporting monthly deliveries to the power plant.
No trial date has been set in the suit.