Arco Wins OK in Santa Clarita Plant Dispute : Environment: State Supreme Court declines to hear a challenge by homeowners seeking to block the power plant in Placerita Canyon.

Santa Clarita homeowners apparently lost their last chance to prevent completion of an Arco power plant in Placerita Canyon this week when the state Supreme Court declined to hear a lawsuit challenging the project.

The court’s decision, released Monday and announced Friday by officials for Arco Oil & Gas Co., was the third straight legal defeat for the Placerita Canyon Property Owners Assn.

The association claimed that the Los Angeles County Board of Supervisors should have required an environmental impact report before granting a conditional-use permit for the $35-million plant in December, 1987.

But a Los Angeles Superior Court judge and the state Court of Appeal said the project did not require such a report.

Steve Schafhausen, president of the property owners association, said the group’s directors will meet with their attorney Wednesday to discuss whether to appeal the case to the U. S. Supreme Court. The suit argued that the plant will contaminate the air and ground water.

Al Greenstein, a company spokesman, said the first of two 21-megawatt electrical generators at the plant is nearing completion and could be operating by January. He said the state Supreme Court’s action removes the last obstacle raised by the property owners. “I believe that’s sort of the end of the line,” he said.

The company is racing to complete the generator before construction permits from the South Coast Air Quality Management District expire Nov. 22.

Greenstein said Arco officials are confident that they will meet the deadline.

The power plant is being built atop an old oil field near Placerita Canyon Road and Sierra Highway. The project was launched by Tenneco Oil Co., but was taken over by Arco when the oil giant purchased Tenneco last year.

Arco plans to pump steam into the ground to loosen and force to the surface about 30 million barrels of thick oil. The steam will also turn turbines to produce electricity.

Schafhausen said the case warranted state Supreme Court review because it concerned state environmental laws. He noted that Atty. Gen. John Van de Kamp filed a brief on behalf of the property owners association. Van de Kamp called the case a “significant issue of concern to the people of California.”

The city of Santa Clarita has also waged an equally unsuccessful legal battle against the plant. The city passed a moratorium to stop the project in December, 1987. But county officials, unaware of the moratorium, issued building permits for the project several months later.

Santa Clarita attorneys said the building permits were illegal.

But a Los Angeles Superior Court judge ruled that Arco should not be penalized for the county’s mistake.

Santa Clarita is appealing the ruling, but Greenstein said Arco and the city have begun negotiating a possible settlement.