Active Energy, company behind proposed wood pellet plant, loses another argument in federal court

Active Energy Renewable Power occupies a 415,000-square-foot building in Lumberton, in Robeson County, that used to house Alamac American Knits. The company is contesting a lawsuit filed by environmental groups over alleged violations of the Clean Water Act. (File photo: Lisa Sorg)

Active Energy Renewable Power, the company behind a proposed controversial wood pellet plant in Lumberton, was dealt another legal setback this week in federal court.

Active Energy had asked US District Court Judge James Dever III to dismiss a citizen lawsuit alleging it had violated the Clean Water Act. Dever denied the company’s motion, which allows the case to continue.

Winyah Rivers Alliance, an environmental nonprofit, sued the company last year. In court documents, Winyah alleges that Active Energy violated the Clean Water Act by discharging industrial pollutants into the Lumber River and Jacobs Branch without a permit.

Active Energy denied the allegations. 

In 2019, Active Energy bought a 415,000-square foot building on 145 acres on Alamac Road to build a wood pellet plant that would use a new technology called CoalSwitch. 

The plant has yet to produce CoalSwitch pellets because of technical problems, as well as the lack of an air permit. The company, which has a troubled legal and financial history, operated a sawmill, which has closed.

There was already extensive groundwater contamination at the site — which the company was aware of — from previous uses, including a dry cleaners. Alamac American Knits had also operated a plant there, but closed in 2017 after several hurricanes flooded the facility.

Contaminants include toxic solvents, like TCE and PCE, as well as benzene, a known carcinogen.

Nonetheless, when Active Energy purchased the building and the land, it voluntarily assumed responsibility for treating any discharges at an existent onsite facility before they entered the waterways.

The lawsuit alleges that for almost a year, Active Energy violated the Clean Water Act by discharging stormwater pollution from its sawmill and other timber operations without a required federal permit. This is known as an NPDES, short for National Pollutant Discharge Elimination System.

Active Energy eventually obtained a stormwater permit, but the lawsuit alleges, continue to violate the Clean Water Act.

Those violations stem from the company’s failure to get a separate required permit for its industrial wastewater discharges. Instead of applying for its own authorization, Active Energy relied on Alamac American Knits permit, which was transferred as part of property deal.

However, emails between the company and the NC Department of Environmental Quality show that before Active Energy discharged any wastewater, it had to update the permit. 

Contaminants in discharges from the timber industry, for example, are different from those used in textiles, and need accounted for.

The company’s monitoring shows at more than two dozen types of pollutants entered the waterways, including zinc, copper, aluminum and total chromium. 

Attorneys for Active Energy rebutted the allegations. The permit the company inherited from Alamac American Knits did allow temporary discharges, while state environmental regulators reviewed a renewal application. Active Energy lawyers argued.

Judge Dever, appointed to the bench in 2002 by President George W. Bush, did not rule on whether Active Energy violated federal law, only that Winyah Rivers’ case was strong enough to continue.

Winyah Rivers is represented by the Southern Environmental Law Center. Active Energy’s attorneys are Shipman & Wright, based in Wilmington.

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