In December, Westar Energy sold its majority stake in its largest coal-fired power plant in the US, a deal worth more than $3bn.
Westar bought the $4bn plant, a gas-fired unit at the Fort Worth refinery, from the state of Texas, where it owns most of the coal and gas assets.
It also bought the US’s largest shale gas resource in North Dakota, which is about 1,500km (930 miles) north of where it has its largest power plant.
But it was the sale of the Fort Lee plant, which it bought for $1.4bn in December, that was the subject of much debate.
The state’s attorney general, Greg Abbott, has previously said that Westar was not in compliance with state law in the sale and it should have obtained the necessary permits from the Environmental Protection Agency (EPA).
The company argued that it had been given ample time to obtain permits and that it complied with the law.
At the time, Abbott’s office was defending the deal.
“The federal government has repeatedly told Westar that it has the authority to grant a permit,” Abbott said at the time.
“It is the state that has the power to determine if it is in compliance.”
But Abbott’s decision last month to allow Westar to proceed with the Fort Texas coal plant deal is drawing criticism from environmental groups and environmental activists.
“The EPA has said it will not give Westar a green light to expand the coal plant and it is clear that it is going to have to take that power to the courts,” says Dan Pfeifer, an environmental law expert at the Union of Concerned Scientists (UCS).
“Westar has shown no respect for the law, or the rule of law, and I think the courts are going to be very, very keen to make sure that this deal is upheld.”
Westar also had to pay the state about $300m in environmental fines for leaking toxic water into Lake Texas, and the company paid about $2.5bn to clean up the plant’s toxic ash and chemical spills.
The plant has been closed since September.
The EPA has been investigating Westar since last year for its alleged role in poisoning Lake Austin, which serves as the mouth of the Mississippi river and the home of the Great Lakes.
On Thursday, the EPA said it was looking into a complaint that the company’s operations at Fort Lee “did not meet the highest levels of air quality standards”.
The EPA said the company had been operating at “substandard” levels of emissions at the plant.
Westalas attorney, Jeff Sperling, told the New York Times that the EPA was looking at Westar’s “complicity in a public health disaster”.
In March, Westal’s stock fell by more than 15% on the news that the state would seek to recover some of the environmental fines from the company.
Abbott’s office said the Fort America deal had been made on a voluntary basis, and that the plant had been in operation since it opened in 2000.