A modified settlement reached between American Electric Power (AEP), a coalition of citizen groups, and the Environmental Protection Agency (EPA) on Monday will allow the utility to install less expensive pollution controls on a coal-fired power plant if it ceases coal combustion by 2015 at three aging power plants in Indiana, Ohio, and Kentucky.

The agreement is a modification of a New Source Review (NSR) consent decree reached in 2007 (from a federal court lawsuit filed in 1999) between AEP, the EPA, eight eastern states, and 13 citizen groups. AEP initiated the modification of the consent decree. It will allow the utility company to install dry sorbent injection technology on both units of its 2.6-GW Rockport Generating Station in southern Indiana—not flue gas desulfurization (FGD) technology, a more expensive option, as stipulated in the original 2007 consent decree , the company told POWERnews.

Under terms of the agreement reached on Monday, AEP will retire or refuel with natural gas the 500-MW coal-fired Tanners Creek Generating Station Unit 4 in Indiana, a unit that AEP had planned to retrofit with emissions controls. The agreement will also require that the company retire or refuel the 600-MW Muskingum River Power Plant Unit 5 in Ohio, which AEP said it had planned to do as part of its Mercury and Air Toxics Standards (MATS) compliance plan. And it gives AEP the option of retiring the 800-MW Big Sandy Power Plant Unit 2 in Kentucky. AEP subsidiary Kentucky Power in December already announced it would retire that unit by 2015 and is now expected to decide on the future of that plant’s 278-MW Unit 1.

Along with allowing the utility to install less-expensive emission control equipment at the Rockport plant, the agreement will require AEP to retire the two Rockport units (built in 1984 and 1989) by 2025 and 2028 or install additional controls to remove at least 98% of its sulfur dioxide emissions. But the agreement would provide flexibility for the company’s Mercury and Air Toxics (MATS) compliance plan for some of its other facilities, AEP spokesperson Melissa McHenry told POWERnews on Monday.

The modification to the consent decree also includes a lower system-wide sulfur dioxide emission cap for AEP plants that will take effect in 2016 and become increasingly stringent until 2029. "The additional SO2 reductions track what we expected to achieve with our compliance plan for the [MATS] rule," McHenry said.

AEP also pledged to develop 50 MW of wind or solar power this year and another 150 MW of wind or solar power in Indiana or Michigan by 2015 as part of the agreement, and will invest $2.5 million to improve air quality in Indiana.

Parties involved with the settlement include the states of New York, Massachusetts, Connecticut, and New Jersey. Citizens groups include the Sierra Club, Natural Resources Defense Council, Ohio Citizen Action, Citizens Action Coalition of Indiana, and the Hoosier Environmental Council.

In a joint statement on Monday, those groups hailed the modified settlement as a major victory. “This agreement is only the latest sign of progress as our country continues to transition away from dirty, dangerous, and expensive coal-fired power plants," said Jodi Perras, Indiana Campaign Representative for the Sierra Club’s Beyond Coal campaign.

The groups cited the Clean Air Task Force, which reportedly estimated that "203 deaths, 310 heart attacks, 3,160 asthma attacks, and 188 emergency room visits per year will be averted once the Muskingum River, Tanners Creek and Big Sandy power plants stop burning coal."

Sources: POWERnews, AEP, Sierra Club

—Sonal Patel, Senior Writer (@POWERmagazine)

This story was originally published on Feb. 27