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United States and New Jersey Announce Clean Air Act Settlement with PSEG Fossil LLC for Violations of 2002 Consent Decree; Utility Required to Pay Significantly Increased Penalties and Reduce Emissions

Release Date: 11/30/2006
Contact Information: Elias Rodriguez, (212) 637-3664 / rodriguez.elias@epa.gov; Cynthia Magnuson, (202) 514-2007 / cynthia.magnuson@usdoj.gov

(New York, NY) The U.S. Environmental Protection Agency (EPA), the U.S. Department of Justice and the State of New Jersey today announced that they have lodged with the court a Clean Air Act (CAA) settlement with PSEG Fossil LLC related to PSEG’s failure to comply with a 2002 consent decree requiring installation of pollution controls at its coal-fired power plants in Jersey City and Hamilton, New Jersey. This new settlement, which is subject to court approval, secures additional air pollution reductions, tighter controls, valuable environmental projects and a significant penalty.

Under the terms of today’s settlement, PSEG will be required to pay a civil penalty of $6 million – $4.25 million to the federal government and $1.75 million to New Jersey. PSEG will also perform environmental mitigation projects valued at $3.25 million to reduce particulate matter from diesel engines in New Jersey.

“The new agreement with PSEG will benefit New Jersey’s environment,” said Alan J. Steinberg, EPA Regional Administrator. “The agreement contains new, more stringent requirements than those to which we originally agreed. Failure to comply with a consent decree is serious business and we will hold the parties accountable until every obligation is satisfied. These changes will advance our commitment to improving air quality for New Jersey and its neighbors.”

“PSEG failed to live up to its obligations under the 2002 Consent Decree, putting air quality and public health at risk,” said Granta Y. Nakayama, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “This new agreement shows that there are serious consequences to violating court orders like the 2002 consent decree, and that EPA will take the necessary steps to enforce its prior agreements to ensure that the public is protected from excessive air pollution.”

“This amended settlement provides increased public health benefits over the original settlement,” said Sue Ellen Wooldridge, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The new hardware commitments in the Amendment add assurance that toxic mercury emissions will be dramatically reduced and will also provide important long-term reductions in NOx and SO2 emissions.”

“While we are never pleased to see any delays in emissions controls on these coal-fired power plants, we nevertheless recognize that our negotiations with PSEG have yielded more stringent emissions reductions than we might have originally achieved. These tougher air-pollution-control measures and the additional projects PSEG has agreed to fund will mean cleaner air for the people of New Jersey and the region as a whole,” said Lisa P. Jackson, Commissioner of the New Jersey Department of Environmental Protection.

The amended agreement, signed by the United States and the state of New Jersey, requires the electric utility to accelerate the installation of air pollution control equipment at its Mercer plant, to install additional control equipment that was not previously required and to carry out a host of interim pollution control measures in exchange for delaying the installation of pollution controls required under the original timeline at the Hudson plant.

Under the 2002 consent decree, PSEG was required to install pollution control equipment at the Mercer and Hudson plants to reduce sulfur dioxide (SO2), nitrogen oxide (NOx) and particulate matter (PM), and take steps to reduce mercury and carbon dioxide emissions. The utility did install pollution control equipment for nitrogen oxides known as selective catalytic reduction (SCR) at its Mercer plant. SCR is capable of reducing nitrogen oxides by approximately 90%. However, PSEG has failed to take the necessary steps to install required pollution control equipment at the Hudson facility as required by the original settlement.

To compensate for the pollution reductions not achieved due to PSEG’s noncompliance, PSEG will be required to install an acid gas scrubber – state-of-the-art technology for removing sulfur dioxide from exhaust gases produced by the power plant – at one of the Mercer plants by 2010, two years earlier than the previous requirement to install it by 2012. PSEG will also install an acid gas scrubber at the other Mercer plant in 2010 as required by the 2002 agreement. PSEG must also now meet a new NOx emissions limit at the Mercer plant starting January 1, 2007. In addition, the company will install baghouses or dust collection chambers at its Mercer plant, which were not required under the original agreement, to cut pollution more than a less effective technology it was previously using. Lastly, PSEG is required to use carbon injection systems, not previously required, to reduce mercury emissions from the Mercer facility.

At the Hudson plant, PSEG will be required to take interim steps to reduce emissions of NOx, SO2 and PM until the required pollution control equipment is installed or the unit is shut down. These interim measures include year-round operation of the existing NOx control equipment utilizing selective non-catalytic reduction to reduce NOx, use of ultra-low sulfur coal, compliance with annual emission caps for NOx and SO2, and operation of an electrostatic precipitator and a fly ash conditioning system to control PM. Installation of permanent controls will be delayed until December 31, 2010, unless PSEG chooses to shut down the unit altogether in 2008. If PSEG does not shut down the Hudson facility and install permanent controls, PSEG will also be required to install a more effective baghouse than previously required, and use a carbon injection system to reduce mercury emissions from this facility after the pollution control equipment is installed.

For the period of the consent decree, PSEG will significantly reduce its emissions of NOx, SO2 and PM in order to achieve the same reductions required under the 2002 Consent Decree. Even after expiration of the decree, EPA estimates that PSEG will permanently reduce its NOx emissions by 534 tons per year, SO2 emissions by 257 tons per year, and fine particle emissions of 252 tons per year.

The utility has also elected to shut down two uncontrolled oil-burning units in Kearny, New Jersey. These shutdowns will further reduce air pollution. PSEG will be required to installed continuous emissions monitoring systems that measure pollutants emitted into the atmosphere in exhaust gases for soot and mercury at its Hudson and Mercer plants. These new requirements will enable the company to continuously track these pollutants and enable it to take appropriate steps to address any problems observed. The state of New Jersey and EPA will use information from these monitors to determine PSEG’s compliance with the emissions limits.

Should PSEG fail to meet the requirements of the amended consent decree, they will be subject to stipulated penalties, ranging from $10,000 per day to $32,500 per day contingent on the type and length of the violation. The amendment also imposes new recordkeeping and reporting obligations to ensure that PSEG stays on schedule with the terms of the agreement.

SO2 and NOx are significant contributors to acid rain; NOx also increases low level ozone, which causes smog; fine particulate matter causes haze. All of these pollutants cause severe respiratory problems and exacerbate cases of childhood asthma.

The modified consent decree, which is subject to a 30-day public comment period and final court approval, is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html. More about the EPA’s efforts in combating air pollution is available at http://www.epa.gov/region2.

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