Arco Nears Completion on Newhall Power Plant : Energy: Despite lawsuits to delay the controversial project, only minor work remains, and a new deadline is disclosed.

For almost a year, an oil company, the city of Santa Clarita and a homeowners association looked forward to this Wednesday with anxiety and dread. It was to be a decisive day in a lengthy legal battle over plans by Arco Oil and Gas Co. to build a power plant in Newhall.

But by this week, it was clear that Wednesday would be just another day and that Arco was well on its way to firing up the plant, which residents say will pollute the air and ground water.

Wednesday was the day construction permits for the project issued by the South Coast Air Quality Management District were to expire. Last year, Arco officials, embroiled in a lawsuit against the company by Santa Clarita, said the city’s suit could force Arco to miss the Nov. 22 deadline.

“The project simply cannot withstand months (or even weeks) of delay,” company attorneys wrote in a brief countering the city suit. “The entire cogeneration project will be defeated by such a delay.”

But on Monday, an Arco spokesman disclosed that in July the AQMD extended the permit deadline to January, 1991. With almost all construction on the first phase of the plant completed anyway, the extra time is almost unnecessary, company spokesman Al Greenstein said.

Heavy construction on the first phase of the 42-megawatt plant is complete, with only minor work remaining, Greenstein said.

The $35-million power plant was originally started by Tenneco Oil Co., which was purchased by Arco last year. As part of the transfer of ownership, the new company was granted new permits by the AQMD, Greenstein said. Even inside Arco, the AQMD’s action was not widely known, and some company officials learned of the new permits only recently, he said.

Arco is now setting its sights on a second and more important deadline--Dec. 20, 1990, he said. By that date, Arco must complete the second phase of the project and begin delivering electricity to Southern California Edison under what even Arco officials admit is a lucrative contract.

That contract would force Edison to pay Arco prime rates for electricity because the contract was obtained under a law from the Carter Administration, which tried to promote alternative forms of energy production. Edison officials have said they will not allow Arco to extend the deadline.

The power plant, located near Sierra Highway and Placerita Canyon Road, is known as a cogeneration plant because it would produce both electricity and oil. Steam that will turn electric turbines also will be pumped into the ground to loosen and force to the surface up to 30 million gallons of heavy oil.

The Placerita Canyon Property Owners Assn. filed suit against the plant in 1988. The association said the Los Angeles County Board of Supervisors violated state environmental law by not requiring an environmental impact report on the project.

The property owners’ claims were rejected by superior court and state appellate court judges who said the supervisors acted legally. Last month, the state Supreme Court refused to hear the property owners’ latest appeal.

Michael McEntee, the association’s attorney, said Monday that it was doubtful that the group would appeal to the U.S. Supreme Court. But McEntee said the property owners will monitor the power plant’s operations closely.

“We will watch for strict compliance” with operating permits, he said.

The Santa Clarita City Council also filed suit against Arco, claiming that construction permits issued by Los Angeles County violated a city moratorium aimed at blocking the plant. A Los Angeles Superior Court judge agreed with city attorneys, who said the permits were issued to Arco by accident, but said the company should not be penalized for the county’s mistake. The city is appealing that ruling.