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Post date: October 9 2007

Cuomo Announces Clean Air Settlement With Nation's Largest Power Company Resulting In Major Reduction In Air Pollution

NEW YORK, NY (October 9, 2007) – Attorney General Andrew M. Cuomo today announced that a coalition of states and environmental groups led by New York and the federal government have reached a settlement with American Electric Power (AEP), the nation’s largest power company, requiring the company to upgrade its “eastern fleet” of power plants, dramatically cutting its emissions in the single greatest reduction of air pollution from a Clean Air Act enforcement action.

Under the settlement, AEP will invest approximately $4.6 billion to cut over 800,000 tons of emissions yearly from a fleet of 16 power plants. The settlement also requires AEP to pay $75 million for penalties and environmental projects.

Air pollution emissions from AEP’s “eastern fleet” of 16 power plants are a large contributor to smog and soot pollution in New York State. These pollutants threaten human health and are directly linked to increases in asthma attacks and lung diseases. They also are primary contributors to acid rain, which has severely damaged lakes, forests, and wildlife throughout New York’s Adirondack and Catskill regions.

“This settlement sends the message that even the largest power company in the United State will be held accountable if it endangers the health of our citizens,” said Attorney General Cuomo. “With this historic settlement, we are removing 800,000 tons of emissions from our air each year - dangerous pollutants that harm our health and ruin our environment - and we are making the polluters pay the price.”

The Attorney General’s office and the EPA led a coalition of seven other states and several environmental groups in commencing litigation in 1999 against AEP for violations of the federal Clean Air Act’s New Source Review provisions. The coalition charged AEP with modifying its facilities and increasing air pollution at its eastern fleet of power plants without installing required pollution controls. These power plants are older, coal-fired plants that lack the necessary technology to reduce air pollution emissions. AEP was originally sued over the modifications at 9 of these power plants, but the settlement announced today succeeded in covering all 16 plants.

Under the settlement, reduced emissions at the power plants will be primarily achieved through state-of-the-art pollution controls or through the shutdown of specific units within the plants. This will cost AEP approximately $4.6 billion. The $75 million AEP must pay includes $15 million for civil penalties, payable to the U.S. Treasury, and $60 million for air pollution reduction projects.

Also under the settlement, caps will be placed on the total amount of sulfur dioxide (SO2) and nitrogen oxide (NOx) pollution that can be emitted by the power plants in AEP’s eastern fleet. These restrictions will tighten on a yearly basis until there is a reduction of approximately 80% in SO2 emissions (translating to a reduction of over 650,000 tons of SO2 annually) and 70% in NOx emissions (translating to a reduction of over 150,000 tons of NOx annually), bringing the power plants’ pollution emission levels far below federal requirements.

When Congress passed the Clean Air Act in 1970, older power plants like those operated by AEP were exempted from having to comply with the stricter air pollution control requirements imposed on newer power plants, except if the older plants underwent modifications that increased their pollution. This “grandfathering” was based on the assumption that these plants would be retired and replaced by new, cleaner power plants. Some companies, like AEP, modified their power plants to extend their life spans while claiming that the modifications were actually routine maintenance and therefore exempt from the stricter pollution control requirements.

The power plants in AEP’s eastern fleet are located in Ohio, Indiana, West Virginia, Virginia, and Kentucky, and have a power-generating capacity of 21,500 megawatts. In 2006, AEP’s eastern fleet emitted a total of 828,000 tons of SO2, while New York’s entire power plant sector emitted 109,000 tons.

The case being settled today is U.S. and N.Y. v. AEP. The settlement is part of a consent decree that was submitted today to Judge Edmund Sargus of the federal district court for the Southern District of Ohio. The coalition led by New York and the EPA includes the States of Connecticut, New Jersey, Vermont, New Hampshire, Maryland, and Rhode Island, the Commonwealth of Massachusetts, and 13 environmental organizations, including United States Public Interest Research Group, National Wildlife Federation, Sierra Club, and Natural Resources Defense Council.

This matter was handled in the Attorney General’s Environmental Protection Bureau by Assistant Attorneys General Robert Rosenthal and Michael Myers.