A plan developed by Oklahoma to address regional haze that was approved by the Environmental Protection Agency (EPA) last week will force Public Service Co. of Oklahoma (PSO) to shutter two coal units by 2026.

The agency on Feb. 10 approved Oklahoma’s state implementation plan (SIP) to control regional haze from two coal units owned by the American Electric Power (AEP) subsidiary at the Northeastern Station in Oologah, Okla. It simultaneously withdrew its federal implementation plan (FIP) that applies to the PSO coal units. Oklahoma drafted that state plan after reaching a settlement agreement with the EPA and the Sierra Club in April 2012.

Under the state plan, PSO will retire one of the two 470-MW coal-fired units at the Northeastern plant by April 16, 2016, and replace it with a natural gas facility. PSO will also install a dry sorbent injection system, a baghouse, and activated carbon injection on the second unit by 2016 but retire that unit in December 2026.

PSO said in a statement that the EPA’s FIP relating to the regional haze rule would have cost the utility and its customers about $650 million more in additional near-term investments than the state plan. “The state plan also resolves PSO’s obligations under the mercury and air toxics standard and allows the utility to avoid additional, expensive investments to meet other current and emerging environmental regulations affecting coal plants,” it said.

PSO reportedly began developing a revised SIP “at the urging of” state leaders, even as it filed litigation challenging the EPA’s rejection of a 2010-submitted SIP with the backing of Oklahoma’s Attorney General Scott Pruitt.

But the state continues to back its largest utility, Oklahoma Gas and Electric (OG&E), in an ongoing legal dispute over the EPA’s authority to deny the state’s plan to address regional haze. Pruitt recently asked the U.S. Supreme Court to review an appellate court’s decision that upheld the EPA’s rejection of Oklahoma’s regional haze SIP.

The EPA said the Feb. 10 action involving PSO would provide better visibility in Oklahoma and areas in the downwind neighboring states of Arkansas and Missouri.

About 23.7 GW of AEP’s 37.6 GW of total generating capacity is coal-fired. The company estimated in an October 2013 financial filing that compliance with environmental rules and other impacts from environmental proposals on its coal fleet could cost between $3.5 billion to $4 billion from 2013 through 2020, including costs to convert units to natural gas. The company plans to retire 6.5 GW of coal-fired capacity by the end of 2016.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)