Wisconsin Power & Light Co. and three other utilities will spend $1.2 billion to clean up coal-fired power plants and shut down older plants under a settlement announced Monday with federal regulators.
Under a settlement filed in federal court in Madison on Earth Day, the Environmental Protection Agency and Justice Department will assess a civil penalty of $2.45 million for alleged violations of air pollution laws over the years.
Madison-based Wisconsin Power & Light and the other utilities also agreed to pay $8.5 million to fund a series of environmental projects over the next five years. The projects include a $5 million investment in solar power and a $2 million investment to boost power production at wind and hydroelectric projects in Wisconsin.
But the big-ticket item in the settlement is the nearly $1.2 billion the utilities will spend to keep the largest of the coal plants operating by adding modern pollution controls.
The settlement was filed Monday and announced by the EPA, Sierra Club and Alliant Energy Corp., which owns WP&L.
In the works for months, the settlement primarily involves Wisconsin Power & Light, but includes utilities that co-own or previously co-owned coal-fired power plants with WP&L. Others named in the settlement are Wisconsin Public Service Corp. of Green Bay, Madison Gas & Electric Co. and We Energies of Milwaukee.
“This settlement will improve air quality in Wisconsin and downwind areas by significantly reducing releases of sulfur dioxide, nitrogen oxide and other harmful pollutants,” said Ignacia Moreno, an assistant U.S. attorney general, in a statement.
The reduction in coal-fired generation prompted by the settlement will reduce emissions of those pollutants – which are linked to smog, asthma, heart attacks and premature deaths – by 54,000 tons, the EPA said.
The agency alleged that the utilities had failed to comply with the Clean Air Act by not installing modern pollution controls when they performed upgrades to the power plants.
The case is similar to those EPA has filed around the country and in Wisconsin. It reached similar settlements last year with Wisconsin Public Service and Dairyland Power Cooperative of La Crosse, and a federal judge in Milwaukee approved a similar settlement for We Energies’ coal plants in 2007.
Under the settlement, Wisconsin Power & Light has agreed to shut down the coal-fired power plant on the Mississippi River in Cassville. Just a few years ago, the utility was seeking to expand that plant.
In a new development, the settlement mandates that additional pollution controls be placed on one of the two boilers at one of the state’s largest coal plants, the Columbia power plant near Portage, said Steve Schultz, a spokesman for WP&L.
Under the agreement, the utility has committed to repower, refuel or add environmental controls to power plants in Sheboygan and Portage. MG&E and WPS are co-owners of those two plants, while We Energies formerly owned part of the Sheboygan plant, known as Edgewater.
In addition to the civil penalty, the consent decree spells out a series of environmental mitigation projects the EPA is requiring as part of the settlement.
By agreeing to stop burning coal at the Nelson Dewey plant in Cassville and two of the three boilers in Sheboygan, 590 megawatts of coal will be retired, or the equivalent of one large modern coal plant, according to the Sierra Club.
Statewide, including settlements with other utilities, the conservation group estimates that over 1,500 megawatts of coal power are being retired, or about 17% of the state’s fleet of coal plants.
Utility ratepayers won’t have to pay for the civil penalties, Schultz said. But it’s possible they could pay for the environmental mitigation costs.
And over time they will be on the hook for paying for the construction of environmental controls at the coal boilers that will remain open.
Those projects include a $627 million project at Columbia, a $153 million project at Edgewater, a $410 million project also at Edgewater, as well as another project at Columbia. The exact cost of that project isn’t yet available, Schultz said.
Story By: Thomas Content