Settlement Reached in Acid Rain Case

posted on:
November 27, 2007



American Electric Power Co. (AEP), a major power generator, has agreed to spend $4.6 billion to reduce chemical emissions blamed for spreading acid rain across the Northeast. 

The utility company, based in Columbus, Ohio, also will be required to reduce the emissions by at least 69% over the next 10 years and pay an additional $15 million in civil penalties and $60 million in cleanup and mitigation costs to help heal polluted parkland and waterways. The settlement was filed with a federal court just before a six-week trial in federal court in Columbus, Ohio, was scheduled to begin.

This settlement includes one of the largest government fines in an environmental case. The EPA, a dozen environmental groups and eight states – Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont – brought the lawsuit against AEP in 1999.

The energy company was accused of rebuilding coal-fired power plants without installing pollution controls as required under the Clean Air Act. Environmentalists blame acid rain caused by coal-fired power plants for plaguing the Northeast over the last quarter-century, including damage that has eaten away at the Statue of Liberty and the Adirondack Mountains range in upstate New York. Smog and acid rain have been linked to sulfates and nitrates that are products of coal-fired plants.

AEP, which has more than 5 million customers in 11 states, has agreed to clean up 46 coal-fired operations in 16 of the plants in its eastern system – a group likely to include at least nine plants in Ohio, Indiana, Virginia, and West Virginia. AEP has maintained that the work in at least some of its plants was routine maintenance that didn't fall under federal requirements for pollution controls. The terms of settlement require AEP to:

• Spend $4.6 billion on so-called scrubbers and other pollution controls to reduce emissions of nitrogen oxide and sulfur dioxide, which cause acid rain and smog.

• Cut nitrogen oxide emissions by 69% by 2016, and reduce sulfur dioxide emissions by 79% by 2018.

• Pay civil fines of $15 million.

• Pay $60 million in mitigation measures. The money includes $21 million to reduce emissions from barges and trucks in the Ohio River Valley; $24 million for projects to conserve energy and produce alternative energy; and $3 million for the Chesapeake Bay, $2 million for Shenandoah National Park and $10 million to acquire ecologically sensitive lands in Appalachia.

This appears to be a good settlement. The EPA and the states involved should be commended for taking the action that resulted in the settlement. It took over seven years to get a resolution, but it appears that the result was well worth it.

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