A settlement between the federal government, the Sierra Club, and Wisconsin Power and Light Co. (WPL) on Monday could require the Madison-based Alliant Energy subsidiary and other defendants to invest more than $1 billion in pollution controls and retire and refuel at least four units at three Wisconsin coal-fired power plants to resolve alleged Clean Air Act New Source Review violations.

The Environmental Protection Agency (EPA), the Department of Justice, and the U.S. Attorney’s Office for the Western District of Wisconsin on Monday said WPL and co- and former owners of three coal-fired power plants located near Portage, Sheboygan, and Cassville, Wis., settled alleged violations of the Clean Air Act. Defending parties include Wisconsin Public Service Corp. (WPSC), Madison Gas and Electric Co. (MGE), and Wisconsin Electric Power Co. (We Energies).

In a 2009 Notice of Violation, the EPA alleged that WPL made past modifications to all seven boilers at the Columbia, Edgewater, and Nelson Dewey Stations without following appropriate preconstruction review and permitting requirements. In September 2010, the Sierra Club filed complaints making similar allegations against WPL in the U.S. District Courts for the Western and Eastern Districts of Wisconsin.

WPL, MGE, and WPSC co-own the Columbia Energy Center, and WPL and WPSC jointly own Edgewater Unit 4. We Energies formerly co-owned with WPL Edgewater’s Unit 5.

Under the settlement , the defendants must install new pollution control technology on the three largest units, continuously operate the new and existing pollution controls, and comply with stringent sulfur dioxide and nitrogen oxide emission rates and annual tonnage limitations. Additionally, the defendants will spend a total of $8.5 million on environmental mitigation projects and pay a civil penalty of $2.45 million.

The settlement also requires WPL and WPSC to permanently retire, refuel, or repower four coal-fired units at the Edgewater and Nelson Dewey plants. By the end of 2015, WPL is expected to shutter its Nelson Dewey Units 1 & 2 in Cassville, Wis., which total approximately 200 MW, and its 70-MW Edgewater Unit 3 in Sheboygan, Wis. Plans are also under way to either convert to natural gas or retire the 300-MW Edgewater Unit 4 by the end of 2018.

WPL told POWERnews it "has been and remains in compliance with the law. However, WPL entered into settlement discussions as a means to avoid costs to its customers, unnecessary delays, and ongoing uncertainty associated with litigation."

“The settlement is a win-win for WPL and the communities we serve,” said WPL President John Larsen in a statement on Monday. “The terms of the settlement are in line with WPL’s energy resources strategy announced in July 2012, which called for investing more than $1 billion from 2012 through 2016 to transition WPL’s generation fleet to meet customers’ energy needs in a cost effective manner now and into the future, while continuing to limit emissions and advance renewable energy. This agreement enables WPL to remain focused on its operations and continue providing our customers with safe and reliable power.”

The judicial settlement is the 26th secured by the Justice Department and the EPA as part of their 1998-begun Coal Fired Power Plant Enforcement Initiative to control emissions from power plants under the Clean Air Act’s New Source Review (NSR) requirements. In fiscal year 2012, the EPA initiated NSR investigations at 836 coal-fired units across the country. NSR pollution control requirements have been resolved for about 461 of these cases by settlement agreements with the EPA or a final judgment in federal district court.

The settlement was lodged with the U.S. District Court for the Western District of Wisconsin and is subject to a 30-day public comment period and final court approval.

Sources: POWERnews, EPA, DOJ, Alliant

—Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)

NOTE: This story was originally published on April 24