Locke Lord Secures Ruling Entitling Brazos Valley Energy, Freeport Energy Center and Freestone Power Generation to Tax Exemption

The Supreme Court of Texas issued an opinion on May 3, 2019, in Texas Commission on Environmental Quality, et al., v Brazos Valley Energy, LLC, et al., Case No. 18-0128, affirming a court of appeals decision in favor of Locke Lord clients Brazos Valley Energy, LLC, Freeport Energy Center, LLC, and Freestone Power Generation, LLC, all affiliates of Calpine Corporation, in an appeal about whether the Texas Commission on Environmental Quality (TCEQ) has discretion to deny a pollution control tax exemption for certain equipment that reduces air emissions at the facilities. Brazos Valley, Freeport, and Freestone were represented by Elizabeth Mack, Geoff Polma (both of Dallas) and Susan Kidwell (Austin). In 2008, the TCEQ had determined that the equipment was pollution control property and entitled to the tax exemption, but in 2012, the TCEQ revoked the exemption. After a successful challenge to the TCEQ Commissioners, who ordered the TCEQ to obtain additional information and reconsider its decision, the TCEQ continued to deny the pollution control tax exemption, a decision that the Commissioners upheld. Following an unsuccessful appeal to the district court, the Austin Court of Appeals reversed the TCEQ’s decision as an abuse of discretion, but in a related case, the El Paso Court of Appeals ruled the opposite. Affirming the Austin Court of Appeals and reversing the El Paso Court of Appeals, the Supreme Court of Texas held that the equipment is pollution control property and entitled to a tax exemption. The cases will return to the TCEQ for determination of the amount of tax exemption.

Locke Lord began representing Brazos Valley, Freeport, and Freestone in 2012 and has led them through a TCEQ administrative appeal process (presented by Elizabeth Mack), the Travis County District Court, the Third Court of Appeals at Austin and finally to the Supreme Court of Texas. Susan Kidwell presented the oral argument in the Texas courts, including the Supreme Court of Texas.
Posted on May 6, 2019