In Newhall : Tenneco Sues Over Right to Build Plant

Tenneco Oil Co. filed a lawsuit Thursday to force the city of Santa Clarita to rescind a stop-work order that has blocked construction of a power plant in Newhall that some residents say will contaminate ground water.

The lawsuit, filed in Los Angeles Superior Court, claims that Tenneco is legally entitled to build the $35-million cogeneration plant because it obtained building permits for the project in good faith. The city maintains that the permits were issued in error and are not valid.

“We believe we have the right to go ahead and complete the project,” said Steven R. Charles, production engineering supervisor for the project. “We’re asking for a writ of mandate compelling the city to set aside the stop-work order.”

A hearing on the suit is scheduled for Nov. 14.

The lawsuit was not unexpected. On Sept. 22, Robert T. Bogan, a Tenneco vice president, threatened to sue Santa Clarita if the City Council did not rescind the stop-work order issued Sept. 1. An effort to settle the dispute fell apart five days later.

The dispute involves four building permits granted to Tenneco in the spring by Los Angeles County, which was acting on Santa Clarita’s behalf while the new city organized its government. Santa Clarita City Atty. Carl K. Newton said the county granted the permits in error because the city had already enacted a moratorium prohibiting construction on the power plant site.

Conditional-Use Permits

Tenneco officials insist the moratorium does not apply to the power plant because the company obtained conditional-use permits from the county days before Santa Clarita incorporated Dec. 15.

Moreover, Tenneco obtained the building permits in good faith and should not be penalized for the county’s error, Charles said.

The city apparently did not discover the problem for months and Sept. 1 told Tenneco to stop work on the gas-burning plant, which is on an old oil field near Placerita Canyon Road and Sierra Highway. Tenneco officials say they are complying with the order, although portions of the plant are still being assembled off the site.

Charles said Tenneco will continue working to persuade the city to lift the ban. The company has invested $16 million in the plant and felt compelled to file suit to keep the project alive, he said.

“The city had backed us into a corner,” Charles said.

Another lawsuit over the cogeneration plant is pending. The Placerita Canyon Homeowners Assn. and city of Santa Clarita charged that the county should have required Tenneco to prepare an environmental impact report before granting permits for the project. A Los Angeles Superior Court judge ruled against the homeowners and the city Feb. 2, but the case is being appealed.