For Immediate Release - February 25, 2013

AG Coakley Leads $8.5 Million Multi-State Settlement with American Electric Power to Improve Air Quality

Consent Decree Filed in Court Calls for More Stringent Reductions of SO2 Emissions from Midwest Power Plants; Improves Air Pollution Settlement from 2007

BOSTON – An Ohio-based electric company has agreed to significantly reduce air pollution from its coal-fired power plants and pay $1 million in mitigation funds to Massachusetts as part of a proposed $8.5 million multi-state settlement, Attorney General Martha Coakley announced today.

Eight states led by AG Coakley’s Office, the Massachusetts Department of Environmental Protection (MassDEP), the U.S. Environmental Protection Agency, and a number of citizens’ groups joined together to negotiate the revised consent decree that improves an already historic 2007 air pollution settlement with American Electric Power (AEP).

If the modified consent decree, filed with the United States District Court in Ohio on Friday, is entered after a public comment period, AEP and its subsidiaries must meet more stringent emissions reductions of sulfur dioxide (SO2) carried from its plants east of the Mississippi River to New England and the Middle-Atlantic. AEP will reduce its total SO2 emissions by approximately 90 percent by 2029 from its baseline emissions before the original 2007 settlement. This will have the effect of reducing annual SO2 emissions by the amount of SO2 released from 28 million homes annually in cold-weather areas like New England that burn home heating oil.

“Massachusetts has long been part of the national effort to protect public health by fighting for cleaner air,” AG Coakley said. “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.”

“This modified settlement is a clean air victory for Massachusetts’ residents,” MassDEP Commissioner Kenneth Kimmell said. “AEP must now dramatically cut the SO2 emissions that dirty our air, and provide additional funding that will be reinvested locally to reduce air pollution – projects that include diesel retrofits and hybrid vehicles.”

As part of the modified consent decree, AEP has agreed to give a total of $6 million to Massachusetts, Vermont, Rhode Island, Maryland, New Hampshire, Connecticut, New Jersey and New York to fund additional programs to mitigate the effects of air pollution carried east from AEP’s Midwest plants. Massachusetts will receive $1 million.

AEP has also agreed to provide $2.5 million in mitigation funds to citizen groups in Indiana, for projects which may include diesel vehicle retrofits, health and safety home repairs, solar water heater installations, replacement of dirty outdoor wood boilers, and/or land acquisition projects.

As part of the original 2007 consent decree, AEP provided $24 million in mitigation payments to the eight states involved, including $3.1 million for Massachusetts. The Commonwealth has utilized those funds on air pollution reduction projects, which include the retrofit of diesel waste collection vehicles, long-haul freight trucks and diesel refrigeration units, subsidies for hybrid trucks and hybrid and electric vehicle charging stations, and the change-out of old, inefficient woodstoves.  

Sulfur dioxide contributes to the formation of sulfates and fine particulates that can cause or exacerbate respiratory illnesses in the most vulnerable populations, including the elderly and small children. It is also the principal contributor to acid rain, which can damage forests, destroy plant and animal life in lakes and other water bodies, deteriorate buildings and monuments, and affect the condition of farm land. 

AEP’s SO2 emissions from its plants east of the Mississippi River before 2007 totaled 828,000 tons annually. The modified consent decree prohibits AEP from emitting more than 145,000 tons of SO2 annually by 2016 – an amount significantly lower than the reduction to 450,000 tons annually by 2010 required by the original settlement.  The consent decree also requires AEP to further reduce annual SO2 emissions to only 94,000 tons per year by 2029. 

AEP will be permitted to use alternative SO2 removal technology at its power plant in Rockport, Indiana, for several years, saving the company more than $1 billion in installation costs. In light of these savings, AEP will later be required to install state-of-the-art SO2 controls and meet much more stringent emission limits at the plant. AEP also has agreed to enter into new contracts to purchase 200 megawatts of wind energy from facilities located in Indiana or Michigan over the next two years to help advance efficiency and renewable resources, and to promote cleaner air. 

Enforcement efforts directed at polluting power plants began in 1999, largely in the Midwest and Southeast where plants operated without proper controls in violation of the federal New Source Review (NSR) program under the federal Clean Air Act. According to original complaints filed against AEP in 1999 and 2004, AEP violated the Clean Air Act by undertaking plant modifications without obtaining required permits or installing modern pollution controls. The case with AEP is the largest and most comprehensive NSR enforcement case to have been brought and settled nationwide.  

Assistant Attorney General Fred Augenstern of Attorney General Martha Coakley’s Environmental Protection Division handled this case for the Attorney General's Office.  Assisting him for MassDEP was Douglas Shallcross of the Office of General Counsel in Boston, with technical support from Edward Braczyk of MassDEP’s Northeast Regional Office in Wilmington.

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