New Source Review (NSR) violations at power utilities became a notably rare occurrence in the 2000s, following EPA decisions to raise the NSR trigger point and also dismiss a number of cases until-then pursued against violators. Those cases took years to come even close to settlement. On Friday, July 23, 2010, the EPA and Justice Department announced a new settlement for violations that took place as recent as 2008.

The EPA, the Justice Department, and the state of Indiana announced that Hoosier Energy Rural Electric Cooperative Inc. had agreed to pay a civil penalty of $950,000 and install and upgrade pollution control technology at its two coal-fired power plants in Indiana to resolve violations of the Clean Air Act's NSR provisions. The company also will be required to spend $5 million on environmental projects.

The agency issued a notice of violation to The company, an Indiana electric generation and transmission cooperative, alleging that in 2008 it made modifications at its Merom coal-fired power plant without first complying with NSR requirements, including obtaining pre-construction permits and limiting emissions based upon best available control technology (BACT).

"The Justice Department is committed to vigorously enforcing our nation's environmental laws, and we are pleased that Hoosier has agreed to install state-of-the art controls that will significantly reduce harmful emissions," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division.

Emissions of SO₂ will be reduced by approximately 20,000 tons and NOx by more than 1,800 tons. The settlement will also reduce harmful sulfuric acid mist and particulate matter emissions. To achieve these reductions, the company has agreed to upgrade existing, and install new, pollution controls at the Merom plant, install new pollution controls at the Ratts plant, and comply with annual tonnage limitations across its system. The company estimates that it will spend between $250 and $300 million upgrading and installing pollution controls at its coal-fired units through the end of 2015.

The company will also spend $5 million on environmental mitigation projects in its service territory to address the impacts of past emissions. Of that, $4.8 million will be spent on one or more of the following projects:

• Coal Bed Methane: The company will capture and combust methane from coal beds to generate at least 10 megawatts of electricity. CO₂ emissions resulting from the combustion of methane will be supplied to a greenhouse for use as a fertilizer.
• Wood Appliance Change-out and Retrofits: The company will sponsor a wood-burning appliance change-out and retrofit project. The company will provide incentives through rebates, discounts and in some instances, replacement of old, inefficient, high polluting wood-burning technology.
• Clean Diesel Retrofits: The company will retrofit in-service, public diesel engines with emission control equipment designed to reduce air pollutants.
• Solar Technologies: The company will install solar power systems on public schools or on buildings housing non-profit groups in the company's service territory.

The settlement is just the 20th under the EPA's national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act's New Source Review requirements.

The proposed settlement was lodged in the U.S. District Court for the Southern District of Indiana and is subject to a 30-day public comment period and final court approval.

More information is available at www.epa.gov/compliance/resources/cases/civil/caa/hoosier.html.

SOURCE: EPA/DOJ Press release