Dynegy and LS Power Group got a shot to the chin recently as a judge said no to their $2-billion plan to build Georgia's first coal-fueled generating plant in more than two decades. In the short term, looks like natural gas will be riding to the rescue. Georgia state Judge Thelma Wyatt Cummings Moore said in a ruling that an administrative law judge was incorrect in upholding the environmental permit for the 1,200-MW Longleaf power plant. Moore heard arguments in Atlanta in June on issues such as how carbon-dioxide emissions can be regulated. Almost as soon as the plant, which would have been located in rural Early County, Georgia, was announced, the greens were on the move. Spearheading the charge against the plant were the Friends of the Chattahoochee Inc. and the Sierra Club. Both groups took their attack to the courts by challenging the operating permit, saying air quality near the plant and water in the Chattahoochee River Basin would be harmed. An administrative law judge upheld the state permit earlier this year. That decision was the one overturned by Moore. Moore's ruling that state regulators must limit carbon emissions from the facility is the first time a court has applied the U.S. Supreme Court's 2007 decision to CO2 from an industrial source. Construction of the plant can't start without a valid permit from Georgia regulators that complies with the new ruling. In April 2007, the High Court ordered Bush administration environmental officials to reconsider their refusal to regulate greenhouse-gas emissions that are linked to global warming. The justices said the Environmental Protection Agency didn't follow the requirements of the Clean Air Act in 2003 when it opted not to order cuts in carbon emissions from new cars and trucks. What the judge didn't say, or for that matter, any of the environmental groups that oppose the power plant, is where the state will get its power from. Most electrical power in the U.S. is generated by natural gas or coal so with coal out, natural gas will probably be looking good right about now. In Georgia, gas is a key energy source. Progress Energy has a 600-MW energy complex in Washington County that consists of four simple-cycle combustion turbine peaking units. The plant, west of Sandersville, is fueled by gas. More to come: Dynegy officials have said they will appeal Moore's decision. What is sure, this isn't the final word in this legal dust-up. –John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com