American Electric Power will pay $8.5 million and stop burning coal at three power plants, part of a revision of a much larger 2007 settlement with environmental groups, states and the U.S. Environmental Protection Agency.
The 30-page agreement, made public this morning, is a revision of a landmark agreement from 2007. The case dates back to 1999.
"This agreement will provide some substantial reductions in pollution, particularly from sulfur dioxide and other dangerous pollutants from coal-fired power plants," said Sandy Buchanan, executive director of Ohio Citizen Action, an environmental group that is one of the parties.
Columbus-based AEP is saying it will stop burning coal by 2015 at the Muskingum River power plant in Ohio, Tanners Creek Generating Station in Indiana and Big Sandy power plant in Kentucky.
The utility sought to reopen the case because it wanted to change parts of the settlement related to adding pollution controls to the Rockport plant in southern Indiana. This new version allows AEP to use a less expensive technology for reducing emissions at the plant. In exchange, the utility has made a series of concessions in other areas.
"We're pleased to be able to reach a modification of the agreement that allows us to have an environmental benefit at a lower cost to our customers," said AEP spokeswoman Melissa McHenry. " Ultimately, these costs get passed on to customers through utility rates."
She did not have an estimate of AEP's cost savings.The utility already had said it was going to close the plants or convert them to other fuels; this agreement means that AEP has little leeway to change those plans without needing to reopen the settlement and make other concessions, Buchanan said.
AEP is also agreeing to develop 200 megawatts of wind power in Indiana by 2015.
Eight states were part of the negotiations, led by Massachusetts Attorney General Martha Coakley. Her office said the new portions of the agreement are worth $8.5 million, of which her state will get $1 million to be used to deal with the effects of air pollution.
"This settlement will require the company to dramatically reduce its harmful plant emissions, invest in more renewable energy resources, and provide funds for programs to mitigate the effects of SO2 pollution," she said in a statement.
The other states are: Connecticut, Maryland, New Hampshire, New Jersey, New York, Rhode Island and Vermont.
The 2007 settlement was the largest of its type in the country's history, with an estimated cost of more than $4 billion, and a wide-ranging agreement by AEP to reduce pollution. At the time, the Environmental Protection Agency said the deal would save $32 billion in health care costs related to respiratory illnesses.
Since then, AEP and the other participants have reopened the case several times to respond to changing conditions in the market and environment. Each time, the sides must agree on changes.
Distributed by MCT Information Services
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