A contentious air pollution exemption granted to Vales Point power station would be carried over to the plant's prospective new owner Sev.en Energy if the existing conditions of sale are upheld.
The coal-fired power station received a five-year licence variation in December 2021, which exempts it from meeting some pollution standards for nitrogen oxide.
The exemption has outraged many in the community who believe the plant should be subject to tighter environmental pollution controls .
The Environment Protection Authority is presently considering its position on the legal challenge and has said it will make a decision in the near future.
Whichever way the decision goes, the conditions will be transferred to the prospective new owner Sev.en Energy.
The state government confirmed on Monday that any conditions imposed as a result of the state government's 2015 sale would continue to be binding on the plant's new owners. Any environmental licence conditions would also continue to apply.
Vales Point is scheduled to close in 2029. But Mr St Baker said earlier this year that he believed the plant, which supplies about 11 per cent of the state's electricity, could stay open 20 years beyond that date.
In addition to air pollution concerns, surrounding communities are also concerned about the clean-up liability and potential environmental impacts of the power plant's coal ash dam.
Environmental Justice Australia lawyer Jocelyn McGarity said there were serious concerns that Delta was operating with unlawful licence conditions.
"If Vales Point power station is allowed to operate beyond 2029, we know it will have continued serious consequences for the health of the community. It's also unknown how the sale will impact the rehabilitation responsibilities for the power station ash dumps," she said.
"Delta has previously acknowledged that rehabilitation requirements will depend in part on how much ash recycling occurs. Sev.en needs to be clear about its plans for ash recycling and outline its long term commitment to remediation for the community."
Energy Minister Matt Kean did not comment on whether he thought the proposed transfer of ownership would have implications for the state's energy security.
A Department of Planning and Environment spokesman said the proposed change of ownership, which will need to be cleared by the Foreign Investment Board, was a commercial matter for the parties involved.
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