Power Company to Pay $4.6 Billion Settlement

American Electric Power, an Ohio-based company, has agreed to a $4.6 billion settlement of a lawsuit over pollution controls at its power plants.

The Justice Department says it's the biggest environmental enforcement settlement ever.

American Electric Power Settles $4.6B Pollution Suit

American Electric Power Co. is required to:

- Spend $4.6 billion on so-called scrubbers and other pollution controls to reduce emissions of nitrogen oxide and sulfur dioxide, which cause acid rain and smog.

- Cut nitrogen oxide emissions by 69 percent by 2016, and reduce sulfur dioxide emissions by 79 percent by 2018.

- Pay civil fines of $15 million.

- Pay $60 million in mitigation measures. The money includes $21 million to reduce emissions from barges and trucks in the Ohio River Valley; $24 million for projects to conserve energy and produce alternative energy; and $3 million for the Chesapeake Bay, $2 million for Shenandoah National Park and $10 million to acquire ecologically sensitive lands in Appalachia.

AEP said it had not violated the Clean Air Act. The Columbus, Ohio-based company had opposed the $15 million civil penalty but did not have to admit guilt as part of the settlement, a spokesman said.

A major power generator Tuesday ended a prolonged legal battle with the government over air pollution, agreeing to shell out $4.6 billion to slash chemical emissions.

The chemical emissions produced by American Electric Power Co. are blamed for spreading smog and acid rain across the Northeast.

The move by the Columbus, Ohio-based company could save some $32 billion in annual health care costs from lung illnesses caused by pollution, estimates government lawyers.

Under the terms of the settlement AEP will spend another $60 million in cleanup and mitigation costs to help heal polluted parkland and waterways.

American Electric Power (AEP) is one of the largest power generators and distributors in the U.S. Its transmission system is a network of nearly 39,000 miles, and serves more than 5 million customers in 11 states.

Michael Morris, chairman, president and CEO of AEP, called the settlement "an excellent outcome" for investors.

"It eliminates the potentially significant financial risk of pursuing the litigation to its conclusion while still achieving the environmental improvements that both we and the government want," Morris said in a statement.

The Environmental Protection Agency, a dozen environmental groups and eight states — Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont — brought the lawsuit against the company in 1999. They accused the company of rebuilding coal-fired power plants without installing pollution controls as required under the Clean Air Act.

In all, the government brought eight lawsuits against polluters accused of violating the Clean Air Act. Four are still ongoing, and AEP was considered the largest polluter of the bunch, government attorneys said.

The settlement marks one of the largest government fines in an environmental case. By contrast, Exxon Mobil Corp. estimates it has paid $3.5 billion in cleanup costs, government settlements, fines and compensation for the 1989 Exxon Valdez oil spill. The company is fighting an additional $2.5 billion in criminal punitive fines.

The settlement sends a clear message that protecting public health means cutting emissions from coal-fired power plants, said Sandy Buchanan, executive director of Ohio Citizen Action, one of the groups that brought the 1999 lawsuit.

"Citizens of the five states and our downwind neighbors have just won an unprecedented public health victory," Buchanan said. "We regret that it took eight years and a legal two-by-four to get AEP's attention."

Environmentalists blame acid rain caused by coal-fired power plants for plaguing the Northeast over the last quarter century, including damage that has eaten away at the Statue of Liberty and the Adirondacks mountain range in upstate New York. Smog and acid rain have been linked to sulfates and nitrates that are products of coal-fired plants.

From NPR reports and The Associated Press

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