Thursday, September 20, 2007

East Kentucky Power Gets $11.4 Million Acid Rain Fine: Largest Ever

Sep 20: In what U.S. EPA called a "landmark settlement," East Kentucky Power Cooperative (EKPC), a coal-fired electric utility, has agreed to pay an $11.4 million penalty to resolve violations of the Clean Air Act’s acid rain program. In the settlement announced by EPA and the Department of Justice, the U.S. is seeking court-approval for the highest fine ever under the Clean Air Act's acid rain program. The Commonwealth of Kentucky joined in the consent decree. The settlement requires that the company take steps to reduce approximately 400 tons of harmful emissions each year and offset another approximately 20,000 tons of emissions released from its Clark County, KY facility without a permit.

The government estimated that the utility’s Dale Generating Station emitted over 15,000 tons of sulfur dioxide and 4,000 tons of nitrogen oxide without a permit from approximately 2000-2005. In addition, the government alleged the utility exceeded the Federal annual emission rate for nitrogen oxides. The utility is also required to apply for an acid rain permit, continuously monitor sulfur dioxide and nitrogen oxides, and install and operate nitrogen oxide controls. These pollution controls will reduce annual nitrogen oxide emissions by approximately 400 tons per year.

Coal-fired power plants are allowed to emit sulfur dioxide and nitrogen oxides in the form of “allowances,” which are granted under Federal or state acid rain permits based on a national annual emissions cap. If a utility emits less, it can sell unused allowances to other utilities, or save them for use later. If it emits more, it must purchase allowances from other utilities and surrender those allowances to EPA. In this case, EKPC is required to purchase and retire allowances representing 20,000 tons of emissions, which represents their emissions during the period of noncompliance.

The agreement allows the company to pay the $11.4 million penalty over six years. Last July, EKPC agreed to install pollution controls estimated to cost $650 million and to pay a $750,000 penalty to resolve violations of the new source review provisions of the Clean Air Act at the Dale facility and two other plants.The latest proposed agreement, lodged in the U.S. District Court for the Eastern District of Kentucky in Lexington, is subject to a 30-day public comment period and final court approval.

Access a release from EPA and links more information on the settlement (
click here). Access a copy of the Consent Decree (click here). [*Air]