(CN) - Utility giant Duke Energy will spend $85 million to reduce air pollution at an Indiana coal-fired power plant, pay a $1.75 million civil penalty to settle Clean Air Act violations, and another $6.25 million on environmental mitigation, the Department of Justice said.
The agreement resolves complaints of Clean Air Act's new-source review violations at the company's Gallagher power plant in New Albany, Ind. The plant is across the Ohio River from Louisville, Ky.
"The settlement is anticipated to reduce sulfur dioxide emissions at the Gallagher plant by almost 35,000 tons per year, an 86 percent reduction when compared to 2008 emissions," the Department of Justice said in a statement.
"This is equivalent to the emissions from 500,000 heavy duty semi trucks, which is more than all the trucks registered in Indiana, Illinois, Kentucky, and Ohio combined."
Sulfur dioxide and nitrogen oxides are converted to fine particulates, which can lodge deep in the lungs and cause a variety of ailments, including premature death. They are also significant contributors to acid rain, smog, and haze. Air pollution from power plants can travel significant distances downwind, crossing state lines and creating regionwide health problems.
Of the $6.25 million for environmental mitigation projects, $250,000 is for the U.S. Forest Service to address acid rain in downwind national forests, $5 million for other projects such as conversion to hydro generation or hybrid vehicle fleets; $1 million for environmental mitigation will be allocated to states that joined the settlement.
New York, New Jersey and Connecticut, the Hoosier Environmental Council and the Ohio Environmental Council joined the federal government in the settlement.
"This important settlement resolves lengthy litigation on very favorable terms," said Ignacia Moreno, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "The settlement will achieve substantial emission reductions through the use of natural gas and other control measures, and it includes important steps to mitigate the negative impact from past illegal emissions as well as a significant civil penalty."
As a result of a lawsuit filed in 1999, Duke went to trial in Indianapolis Federal Court in May 2009 for the alleged violations. A jury found that Duke violated the Clean Air Act by failing to obtain required permits and pollution controls before modifying Gallagher Units 1 and 3, causing significant increases in sulfur dioxide. The trial to determine the appropriate remedy for these violations resolved by the settlement had been scheduled to begin on Jan. 25, 2010.
"The settlement requires Duke to either repower units 1 and 3 at the Gallagher plant with natural gas or shut them down to remove all sulfur dioxide pollution. This natural gas repowering will also reduce other air pollutants, including nitrogen oxides, particulate matter, mercury, and carbon dioxide," according to the Department of Justice.
"The combined nitrogen oxide emissions from units 1 and 3 are expected to decrease by about 2,198 tons per year as compared to 2008 emissions. By using natural gas rather than coal, Duke will eliminate emissions of particulate matter and mercury from the units. EPA also expects a 50 percent reduction per unit of energy in these units' carbon dioxide emissions because of the switch to natural gas."
The settlement also requires that Duke install new pollution controls for sulfur dioxide at the other two units at the plant.
Prosecutors say this is the 17th settlement secured by the federal government as part of a national enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act's new-source review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.
Based in Charlotte, N.C., Duke supplies and delivers energy to approximately 4 million customers in the Midwest and the Carolinas.
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