Public Service Company of Oklahoma (PSO), a unit of American Electric Power (NYSE: AEP), said April 24 that it has agreed in principle with the U.S. Environmental Protection Agency, the state of Oklahoma and the Sierra Club on a framework for PSO to comply with EPA regulations affecting PSO’s two coal-fired units at its Northeastern plant in Oologah, Okla.
The agreement addresses PSO’s future obligations under the EPA’s Regional Haze rule (RHR) and Mercury and Air Toxics Standards (MATS). Under the agreement, PSO would meet specified emissions rates at both Northeastern coal units, install certain emissions control equipment on one of the Northeastern coal units in 2015, and retire the other unit in 2016. The coal unit with the added emissions controls would be retired in the 2025-26 timeframe. The agreement also will result in PSO withdrawing its lawsuit against the EPA regarding the Regional Haze rule.
“This landmark agreement outlines a clear and cost-effective path for compliance by PSO’s Oklahoma coal-fired generating units with the EPA’s new rules,” said Stuart Solomon, PSO’s President and COO. “It allows PSO to implement a compliance plan that resolves the company’s most significant environmental issues, provides a manageable transition for our generation fleet, and assures continued reliability for our customers.”
The parties to the agreement will work together to develop definitive settlement documents in the next 30-60 days. The settlement will then be subject to public review and comment.
PSO will file with the Oklahoma Corporation Commission (OCC) an environmental compliance plan that reflects the agreement. The OCC must approve costs associated with the plan before PSO can recover those costs from customers.
AEP’s Feb. 28 annual Form 10-K report shows that the two coal units at Northeastern, Units 3 and 4, total 930 MW, with the first unit commissioned in 1979. U.S. Energy Information Administration shows the plant taking all Wyoming Powder River Basin coal in January, from Peabody Energy’s (NYSE: BTU) Caballo and North Antelope Rochelle mines, and the Cordero and Antelope mines of Cloud Peak Energy (NYSE: CLD).