A lawsuit by the federal government, eight states and 13 citizens’ groups against Columbus, Ohio-based American Electric Power Inc. has ended in a record $5.35 billion settlement, the U.S. Environmental Protection Agency and U.S. Department of Justice announced Tuesday.
The utility company had been sued for creating major pollution at 16 coal-fired plants in five states. None of the host states – West Virginia, Virginia, Kentucky, Ohio and Indiana – were plaintiffs in the suit, but eight others downwind from the plants, including Rhode Island, did.
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“Today’s settlement will save $32 billion in health costs per year for Americans,” said Granta Y. Nakayama, EPA assistant administrator for enforcement and compliance assurance. “Less air pollution from power plants means fewer cases of asthma and other respiratory illnesses.”
The agreement is expected to bring cleaner air to a vast swath of the Mid-Atlantic and Northeast regions.
“The agreement reached with American Electric Power Co. and lodged with the court this morning requires the company to install about $4.6 billion in emissions controls,” said Acting Assistant Attorney General Ronald J. Tenpas, of the Justice Department’s Environment and Natural Resources Division.
The company also agreed to pay a civil penalty of $15 million and spend another $60 million on projects to mitigate the effects of its past excess emissions, such as buying environmentally sensitive properties and “taking action on its own fleet [of vehicles],” bringing its total expenses from the settlement to $5.35 billion.
“When implemented, this agreement will produce a 77-percent reduction in emissions,” Tenpas added. By 2019, AEP must reduce emissions by more than 813,000 tons per year.
The settlement comes in a case brought in 1999 against AEP and five wholly-owned subsidiaries, alleging that the company violated the New Source Review requirements of the federal Clean Air Act. The government alleged that AEP had made changes to its coal-burning plants, Tenpas explained, “changes that increased emissions,” and argued that the company should have installed state-of-the art emissions controls at the time of those changes.
Federal investigators found that all 46 units identified in the complaint had made major modifications without obtaining the requisite permits under the Clean Air Act, R.I. Attorney General Patrick C. Lynch said in a statement responding to the EPA announcement.
“These companies not only increased the amount of harmful air pollutants they were generating but also failed to install the best technologies available,” Lynch said. “They did so at the economic expense of power plants here in Rhode Island that were in compliance with the most stringent technology requirements of the Clean Air Act.”
“The reduction in pollutants from these huge power plants should help us in gaining attainment of our ozone standard by 2009, as well as reducing particulate matter and regional haze,” said W. Michael Sullivan, director of the R.I. Department of Environmental Management, which had worked with the Attorney General’s Office on the case for the past eight years. “The outcome is a good example of how, by working together within Rhode Island and with other states and the federal government, we can solve persistent air-quality problems.”
Queried about why the government chose to settle, rather than continue its court battle, Tenpas called the case “hard-fought.” The government already devoted “more than 52,000 attorney hours … 26 attorney years …to this case alone,” he said, adding: “This is an agreement that secures very definite, very concrete steps … and very definite penalties.”
“This is truly an historic day for the United States,” Nakayama said. He described the AEP deal as “the largest settlement ever, as measured by its injunctive relief,” by its health benefits, and by its benefits to the environment. “This is the largest settlement by about a power of four, compared to any prior settlement,” he added.
In the past three years, the EPA had won about 1 billion pounds per year in emissions reductions, Nakayama said, and those were some of the biggest years in the agency’s history. By contrast, “this single case will yield [more than] 1.6 billion pounds” in annual emissions reductions.
The agreement, lodged Tuesday in the U.S. District Court for the Southern District of Ohio, is subject to a 30-day public comment period. It averts “a follow-on trial that would have begun today,” to determine what remedies the government might apply, Tenpas noted.
“Today’s settlement fulfills the best hopes of the Clean Air Act,” he said. It “will have an unprecedented impact on air quality in the eastern United States.” •
Additional information on the settlement with American Electric Power Co. is available from the U.S. Environmental Protection Agency at yosemite.epa.gov.
