WASHINGTON -- A major electric utility, Cinergy Corp., has agreed to a $1.4 billion settlement of a lawsuit over alleged illegal pollution from its coal-burning power plants, the Clinton administration says.
The settlement expected to filed in court Friday stems from a four-year investigation by the Environmental Protection Agency involving more than a half dozen of the country's largest electric utility companies.
The EPA alleges that the utilities failed to install required pollution-control equipment in some of their older coal-fired power plants in violation of federal law. The utilities have denied any such violations.
The settlement with Cinergy, based in Cincinnati, Ohio, includes an $8.5 million fine, but most of the estimated $1.4 billion will be spent on environmental improvements at Cinergy plants in Indiana and Ohio, officials said.
Cinergy admitted no wrongdoing and has denied violating the Clean Air Act as EPA investigators have alleged.
The agreement "allows us to gain certainty regarding any future operations and reduce emissions," said Cinergy chairman James Rogers. He said the projects under the agreement "are in line with the environmental requirements that we believe our plants are expected to face over the next 15 years."
Two other power companies, targeted by the EPA investigation, previously had reached similar settlements, each agreeing to make environmental improvements worth about $1 billion.
Some of the utilities, including the Ohio-based American Electric Power Co., have vowed to fight the EPA charges, claiming that plant changes cited by EPA investigators amounted to legal maintenance improvements.
The settlement by Cinergy involved 10 coal-burning power plants operated by PSI Energy in Indiana and Cincinnati Gas & Electric Co., in Ohio. Cinergy also provides electricity in Kentucky, but those plants were not part of the enforcement action.
Sylvia Lowrance, EPA's deputy assistant administrator for enforcement, said most of the $1.4 billion involves capital expenditures the company has agreed to make to curtail pollution at the Ohio and Indiana plants.
She said Cinergy has agreed to install permanent emission control equipment "to meet stringent pollution limits" and implement a series of interim measures to curtail emissions from the plants as well as contribute $21.5 million for various environmental projects.
The company said that under the settlement a number of coal-fired boilers would be either shut down or converted to natural gas.
"This is the largest enforcement settlement ever reached by the U.S. Environmental Protection Agency under the Clean Air Act," said EPA Administrator Carol Browner, who called it the Clinton administration's "last action to provide cleaner air for all Americans."
Two utilities -- Tampa Electric Power in Florida, and Dominion Virginia Power -- earlier reached similar settlements with the EPA as a result of the investigation of the utility industry begun in 1996.
"We're still in discussion with a number of companies," said Lowrance in a telephone interview.
The Justice Department, acting on behalf of the EPA, has filed lawsuits, alleging violations of the Clean Air Act, by plants belonging to American Electric Power, FirstEnergy, Illinois Power, Southern Indiana Gas & Electric Co., and the Southern Company. A separate administrative action has been taken against the government-owned Tennessee Valley Authority.
All of the actions stem from allegations that the utilities have made improper improvements at some of their old coal-fired power plants, most of which dot the Ohio Valley and parts of the Midwest, without getting proper pollution permits required by the Clean Air Act.
In the case of Cinergy, the lawsuit claimed that the two operating companies in Ohio and Indiana over the 15 years have "undertaken at least 38 substantial modifications" that increased the amount of pollution coming from the plants "without taking steps to minimize these increased emissions."
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