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U.S ANNOUNCES CLEAN AIR SETTLEMENT WITH CINERGY

Release Date: 12/21/00
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

THURSDAY, DECEMBER 21, 2000 FOR IMMEDIATE RELEASE

DOJ: (202) 514-2008
EPA: (202) 564-9828
TDD: (202) 514-1888

U.S ANNOUNCES CLEAN AIR SETTLEMENT WITH CINERGY

Actions Are Part of National Initiative to Stop
Illegal Pollution From Coal-Fired Power Plants

WASHINGTON, D.C. B In an ongoing initiative to stop air pollution released illegally from coal-fired power plants, the Justice Department and the EPA today announced a settlement of a lawsuit with Cinergy Corporation, an electric utility based in Cincinnati. The enforcement action, valued at $1.4 billion, is the largest ever taken by the U.S. EPA under the Clean Air Act.

AToday, I am announcing the largest enforcement settlement ever reached by the U.S. Environmental Protection Agency under the Clean Air Act. It is the Clinton-Gore Administration=s latest action to provide cleaner air for all Americans,@ said EPA Administrator Carol M. Browner. AToday=s action will help ensure that the health of millions of citizens throughout the Eastern United States is protected from harmful levels of air pollution.@

Coal-fired power plants collectively produce more pollution than any other industry in the United States. Nearly four years ago, EPA began an investigation of coal-fired power plants, including those owned by Cinergy. The federal government in November 1999 filed suit against several electric utilities B including Cinergy B charging that they violated the law by making major modifications to their power plants without installing equipment required to control smog, acid rain and soot. Since that time a number of states and environmental groups including those involved in today=s settlement, have joined in EPA=s efforts, including in this case Connecticut, New York and New Jersey.

The states and several citizen groups joined the agreement in principle with Cinergy Corporation and its two operating companies -- PSI Energy and Cincinnati Gas & Electric Company -- that requires the companies to significantly reduce harmful air pollution from 10 coal-fired power plants, perform $21.5 million in environmental projects, and pay an $8.5 million fine.

The agreement with Cinergy will result in substantial pollution reduction from one of the largest and most coal-dependent utilities in the nation. About 95 percent of Cinergy=s generating units use coal to produce electricity to serve more than one million customers in Indiana, Ohio, and Kentucky. Under the agreement sulfur dioxide emissions ultimately will be reduced by 400,000 tons per year and nitrogen oxide by 100,000 tons per year.

Under the agreement, Cinergy will spend an estimated $1.4 billion to install permanent emissions-control equipment to meet stringent pollution limits; implement a series of interim pollution-reduction measures to reduce emissions while the permanent controls are designed and installed; decrease the amount of pollution released from its plants; and retire pollution emission allowances that Cinergy could have otherwise used to emit additional pollution. The agreement gives Cinergy flexibility in meeting its pollution reduction requirements and the ability to efficiently plan for future energy demands.

Although the enforcement action against Cinergy targeted six of its plants, the agreement limits emissions from all 10 of the company=s coal-fired plants in Ohio and Indiana.

The sulfur dioxide and nitrogen oxides produced by power plants in the Ohio River Valley and the Southeast affect air quality near the facilities and also far downwind of the plant. These pollutants also contribute to acid rain in the Northeast. The Attorneys General of New York, New Jersey, and Connecticut, as well as the Hoosier Environmental Council, the Citizen Action Coalition of Indiana, and the Ohio Environmental Council, joined federal officials in working with Cinergy to reach the agreement announced today.

The agreement in principle will form the basis of a consent decree to be filed in Indianapolis that will settle federal claims that Cinergy violated the Clean Air Act. Specifically, federal regulators said that over the past 15 years, Cinergy has undertaken at least 38 substantial modifications to these plants, increasing pollution output, without applying for a Clean Air Act permit and without taking steps to minimize these increased emissions. The agreement in principle was signed late this afternoon.

In addition to Cinergy, the United States has brought legal actions for Clean Air Act violations against American Electric Power, FirstEnergy, Illinois Power, Southern Indiana Gas & Electric Company, the Southern Company, and the Tampa Electric Company. The EPA has brought a related administrative action against the Tennessee Valley Authority B a federal agency that owns and operates many coal-fired power plants.

With the exception of the Tampa Electric Company, these lawsuits continue. In February 2000, the Justice Department and the EPA reached an agreement to settle Clean Air Act claims with the Tampa Electric Company. Also as part of the initiative, the United States last month reached an agreement in principle with Virginia Electric Power Company, which calls for the Richmond-based utility to undertake major environmental improvements.

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