Utility Pollution Settlement Spurs Wind, Solar Projects

A recent settlement between FirstEnergy Corporation’s subsidiary, Ohio Edison, and the U.S. government found the power producer in violation of the Federal Clean Air Act. The resulting landmark settlement with the government will clean up the bulk of the utility’s coal-plant emissions and also propel significant new commitments to wind power and solar energy as further mitigation measures.

The settlement resolves a lawsuit filed in 1999 as part of a federal government initiative, joined by the states of New York, New Jersey and Connecticut, to bring operators of coal-fired power plants into compliance with the New Source Review (NSR) provisions of the Clean Air Act. The main power plant in question was the W.H. Sammis Station, a coal-fired power plant in Stratton, Ohio, operated by Ohio Edison. The Sammis Station is one of the largest sources of air pollution in the nation, emitting a total of about 205,000 tons of SO2 and NOx in 2003. After a four-week trial in 2003, the U.S. District Court for the Southern District of Ohio agreed with the government that there were NSR violations at the Sammis plant. The court had not yet held the second trial needed to determine what pollution controls, penalty and other remedies would be required for these violations. The settlement resolves the remedy phase of this litigation, thereby averting a trial. The consent decree agreed to by Ohio Edison will reduce emissions of harmful sulfur dioxide (SO2) and nitrogen oxides (NOx) from the Sammis plant, as well as from other Ohio Edison and FirstEnergy coal-fired power plants, by over 212,000 tons per year. The pollution controls and other measures required by the consent decree are expected to cost approximately $1.1 billion. Ohio Edison is required to use $25 million of the settlement amount for mitigation projects to compensate for the harmful effects of Ohio Edison’s past violations, which makes it the largest mitigation project commitment in any of the United States’ NSR settlements with utilities to date. This is the ninth settlement that the federal government has entered into to address Clean Air Act NSR violations by coal-fired power plants. In terms of both the amount of the pollution reductions and cost, this settlement is the second largest of the power plant NSR settlements to date. The $8.5 million civil penalty imposed is the second largest penalty against a power plant. In total, additional environmental controls could be installed on nearly 5,500 MW of the company’s 7,400 MW of coal-based generating capacity, with construction beginning in 2005 and completed no later than 2012, according to FirstEnergy. In addition to the new environmental controls, the settlement will ensure new renewable energy projects as well. Out of the $25 million, Ohio Edison will fund $14.4 million in renewable energy development projects, specifically wind power projects in Pennsylvania, New Jersey or western New York. Ohio Edison is required to enter into 20-year contracts to buy power from wind projects with a total capacity of at least 93 MW, according to the DOE’s office of Energy Efficiency and Renewable Energy. However, if the wind energy production tax credit is not in force or not applicable to any of the projects, Ohio Edison need only contract for 23 MW of wind power. The wind projects must be located in Pennsylvania, New Jersey, or western New York. With pre-approval from the plaintiffs, Ohio Edison can also substitute landfill gas projects in Connecticut, New Jersey, or New York for some or all of the wind power requirement. Ohio Edison must also provide $400,000 to fund a 52 kW solar power system in Pittsburgh, Pennsylvania. The renewable energy generated will displace an equivalent amount of coal-fired power and thereby further reduce emissions from coal-fired plants. Emissions from power plants are carried significant distances downwind, causing air quality problems in other states to which the polluted air is carried. Sulfur dioxides and nitrogen oxides cause severe respiratory problems and contribute to childhood asthma. These pollutants are also significant contributors to acid rain, smog and haze. “This settlement creates the new high-water mark for putting resources into the communities affected most directly by a utility company’s actions,” Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, said. “This…agreement can serve as the foundation upon which we build new ways to reduce pollution and invest in renewable energy sources to benefit future generations.”
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