Illinois Power Settles Clean Air Case for $500 Million

By J.R. Pegg

WASHINGTON, DC, March 8, 2005 (ENS) – Illinois Power Company and its successor company Dynegy Midwest Generation will spend some $500 million on new pollution controls at five Illinois coal-fired power plants to settle alleged violations of the Clean Air Act, the Bush administration announced Monday.

The settlement includes an additional $9 million civil penalty and a commitment by Dynegy to spend $15 million on projects to mitigate the harm caused by past emissions.

Dynegy will also give 1,135 acres of forest along the Middle Fork of the Vermillion River to the state of Illinois for a nature preserve.

"The citizens of Illinois could not have asked for a better result," said Thomas Sansonetti, assistant attorney general for the U.S. Justice Department's Environment and Natural Resources Division.

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Dynegy Midwest Generation's Baldwin Energy Complex is a three-unit coal-fired power-generating facility for central Illinois. (Photo courtesy DOE)
The settlement brings to a close federal and state litigation that alleged the Illinois Power had not complied with the New Source Review provisions of the Clean Air Act, which require that new pollution controls be installed when plants are expanded or modified to produce additional power.

In 1999 the Clinton administration filed suit against Illinois Power for alleged violations at two units of the company’s Baldwin Power Station.

The power plant, located in Randolph County, Illinois, was one of the largest air pollutions sources in the nation at the time the suit was filed – spewing some 245,000 tons of sulfur dioxide (SO2), which causes acid rain, and 55,000 tons of smog forming nitrogen oxides (NOx) annually.

The suit alleged Illinois Power modified the two units between 1985 and 1999 without complying with permit and emission control limits required by New Source Review.

The proposed settlement covers the Baldwin plant, as well as four other Illinois facilities – in Havana, Hennepin, Oakwood and Alton.

Under the terms of the settlement, the company will invest $321 million in emission control projects by 2010, with an additional $224 million in investments in the 2011 - 2012 timeframe.

The settlement requires the installation of four new scrubbers to control SO2, four new baghouses to control particulate matter, as well as year-round operation of existing control equipment to control NOx and systemwide upgrades of other existing particulate matter controls.

Federal officials said the deal would cut overall annual SOx emissions by 39,000 tons and NOx emissions by 14,800 tons.

The state of Illinois and a coalition of citizen groups intervened in the litigation in 2003 on behalf of the federal government and are parties to the settlement.

Illinois Attorney General Lisa Madigan said the settlement has “the potential to improve air quality in Illinois from the Metro East area to the Chicagoland area.”

The $15 million earmarked for mitigation projects will finance efforts at enhanced mercury reduction, municipal building energy conservation, and advanced truck stop electrification to reduce air emissions from diesel exhaust.

In addition to the land to be donated to the state, Dynegy will support other efforts to preserve forests and wetlands in the St. Louis Metro East area and along the Illinois River.

Dynegy officials noted that since the suit was filed the company has cut S02 emissions at the Baldwin plant some percent by converting it to low sulfur coal and reduced NOx emissions by 65 percent by installing control equipment.

Illinois

Smoggy air over Illinois (Photo courtesy Orion Lawlor)
"Our settlement will help ensure that Dynegy's Midwest power generation facilities are among the cleanest coal-fired fleets in the United States,” said the company’s chairman, president and CEO Bruce Williamson.

“The settlement also builds on a proven track record of improvements that will enable us to continue to serve the growing energy needs of the Midwest market in an environmentally responsible and efficient manner," he said.

The proposed settlement was filed Monday in the U.S. District Court for the Southern District of Illinois in East St. Louis and will be open for public comment for at least 30 days.

The settlement is the eighth in a series of New Source Review agreements brokered by the federal government with coal-fired power plant operators – the civil penalty of $9 million is the largest to date of any New Source Review settlement.

The deal comes amid heightened scrutiny of the Bush administration’s enforcement of federal clean air laws as the White House and Congressional allies push forward on a number of fronts to revise the Clean Air Act.

The Senate Environment and Public Works Committee is scheduled Wednesday to consider the Bush plan – Republican leaders have canceled two recent mark ups of the controversial bill in renewed efforts to pass the bill out of committee.

The administration believes existing law is often counterproductive, forcing industry to delay or avoid needed maintenance that could reduce emissions for fear of the program’s bureaucracy and penalties.

Environmentalists, public health advocacy groups and state pollution control officers argue the administration’s efforts gut a program that has proven effective.

“The Bush administration is trying to eliminate the very part of the Clean Air Act that yielded this victory for public health,” said David McIntosh, a staff attorney with the Natural Resources Defense Council. “If Congress passes the administration's air pollution plan, or if the administration succeeds in weakening the law's new source review rules, settlements like the one reached today would not be possible.”