US power firm in emissions deal, pays $15m fine

09 October 2007 15:15 [Source: ICIS news]

TORONTO (ICIS news)--American Electric Power (AEP) will invest $1.6bn (€1.1bn) to reduce emissions at coal power plants and pay a $15m fine as part of a settlement with the US Environmental Protection Agency (EPA) and 14 environmental organisations, it said on Tuesday.

AEP, one of the largest US electric utilities, will also pay $60m for environmental remediation projects to federal and state governments for allegedly breaching clean air legislation.

Under the settlement, which will be filed on Tuesday with a US District Court in Ohio, AEP agreed to annual sulphur dioxide (SO2) and nitrogen oxides (NOx) emissions limits for its 16 coal-fuelled power plants in Indiana, Kentucky, Ohio, Virginia and West Virginia, it said.

A US newswire reported that AEP would spend some $4.6bn to cut emissions as part of the settlement but a spokeswoman for AEP’s head office in Columbus, Ohio, told ICIS news that that was a "mis-characterisation ... we don't know where they [the newswire] got that from."

The spokeswoman said AEP agreed to install additional emissions control equipment at two plants in Ohio and Indiana at a cost of about $1.6bn. That investment was scheduled to take place in the 2017-2019 timeframe, she added.

The settlement ended eight years of litigation over alleged violations of the US Clean Air Act’s New Source Review (NSR) provisions, AEP said, adding that it admitted no violation of law and continued to believe that it operated its plants in compliance with the law.

The NSR provisions require new major sources of emissions or existing sources that undergo major modifications to install additional environmental controls.

The EPA’s complaint alleged that AEP made major modifications at some of its coal-fuelled generating units without obtaining the necessary permits and without installing controls required by the Clean Air Act to reduce SO2, NOx and particulate matter emissions.

AEP has, since 2004, spent some $2.6bn on emissions control equipment on its coal plants in Kentucky, Ohio, Virginia and West Virginia as part of a larger plan to invest more than $5.1bn by 2010 to reduce emissions from its plants, it said.

In a similar case regarding the NSR requirements, DuPont in July reached an agreement with authorities over emissions from four of its sulphur products plants.

($1 = €0.71)

By: Stefan Baumgarten
+1 713 525 2653

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