Claims by the United States

The AEP case remains the largest Clean Air Act power plant case ever filed by the Enforcement Section. It concerned 30 electricity generating units located at 10 power plants across the mid west in Indiana, Ohio, Kentucky, and West Virginia. Our claims at all these generating units were essentially the same: the company violated the New Source Review provisions of the Clean Air Act when it constructed major modifications at these facilities, causing increases in sulfur dioxide, nitrogen oxides, or particulate matter emissions, without installing the Best Available Control Technology as the law requires.

As a result, we maintained that millions of excess tons of these pollutants had been emitted into the atmosphere harming the public and endangering the environment:

• Power plant emissions form very fine particulate matter when they react in the atmosphere which poses significant risks to children and the elderly.

• These emissions are also a primary cause of the acid rain that has damaged forests and lakes, particularly in the downwind northeastern states, and contribute to ground level ozone which creates the smog that pollutes major metropolitan areas and the haze that clouds our mountains and parks.

The Litigation

The case attracted significant attention: eight states and fourteen citizen groups joined the United States as co-plaintiffs. The litigation began in November 1999 as part of a very large, coordinated filing against seven electric utilities operating coal-fired power plants across the Midwestern and southern states. AEP progressed through massive discovery and complicated pretrial proceedings, and then a lengthy trial focused on the company’s liability for violating the Act. The company interposed significant defenses to its liability. Most notably, it maintained that the projects it constructed were exempt from New Source Review because they were merely “routine maintenance, repair, or replacement” of existing equipment, and it argued that, even if the projects were not routine, they did not cause significant increases in emissions.

Landmark Settlement

Right before the district court planned to issue its opinion resolving the company’s liability, all the parties were able to reach a landmark settlement that embraced the company’s entire Eastern System (comprised of 46 emission units) --- much broader coverage than the allegations of the complaint:

• AEP agreed to install state-of-the-art emission controls on most of the units in its system at a cost estimated to reach $4.6 billion.

• It is expected that these controls, once installed and fully operational, will reduce the company’s massive yearly emissions (which were about 1 million tons) of sulfur dioxide and nitrogen oxides by a combined total of 813,000 tons each year.

• The company also agreed to pay a $15 million civil penalty and to perform $60 million in additional environmental projects directed at mitigating the harm to public health and the environment caused by its violations – these remain the largest sums obtained in any of the twenty-two settlements with power plant operators since the Power Plants Initiative began.

The emission reductions secured by the settlement are truly exceptional. Combined with the other settlements secured in the Initiative, these enforcement actions will collectively secure over 2 million tons of sulfur dioxide and nitrogen oxide emission reductions each year.