Wisconsin Public Service (WPS), a subsidiary of Integrys Energy Group (NYSE: TEG), said Jan. 4 that it has reached a settlement with the U.S. Environmental Protection Agency on a Notice of Violation against WPS the agency filed in November 2009.
The notice alleged that the utility had not obtained the proper air permits for improvements it made to electric generating units to ensure electric reliability as far back as 1994. WPS said it does not admit any wrongdoing through this settlement.
“We acted then using what we believed to be the proper process for making the improvements,” said Terry Jensky, WPS Vice President of Generation Assets. “Many utilities across the country followed the same procedures and they have or are now facing similar action from the EPA.”
In the settlement, WPS agreed to retire, refuel or repower its coal-fired Weston Units 1-2 (located near Wausau, Wisc.), as well as Pulliam Units 5-6 in Green Bay. The deadline for completing the activities is June 1, 2015. All of these actions are consistent with the utility’s evolving generation strategy as it aligns its portfolio to the best interests of customers and other stakeholders, WPS noted.
The settlement included a provision for WPS to install its previously-announced innovative ReACT environmental controls at Weston Unit 3 (321 MW). The system will reduce emissions of several pollutants and will position the unit to be in compliance with future EPA regulations. The ReACT installation will be the first commercial application of this technology in the U.S. WPS opted to move forward with ReACT in advance of the settlement. Following Public Service Commission of Wisconsin approval, which is in the works, the ReACT project will take more than 3.5 years to complete.
In addition, WPS agreed to more restrictive limits on emissions than current air permits require for Pulliam Units 7-8, as well as at its other coal-fired generators systemwide. It may result in some coal-fired generators operating less. Any power lost will be replaced by some combination of natural gas-fired generation or purchases from the market, WPS noted.
WPS has previously installed controls at both Weston and Pulliam to reduce emissions of SO2, NOx, mercury and particulate matter.
Weston Units 1-2 have a combined nameplate generating capacity of 135 MW, while the capacity of Pulliam Units 5-6 is 112.5 MW. The Pulliam units were built around 1950, while Weston Unit 1 became operational in 1954, with Weston Unit 2 following in 1960.
Also in the settlement, WPS agreed to pay a civil penalty of $1.2m, as well as commit to spending $6m for beneficial environmental projects, including new technologies to improve the performance of WPS wind and hydropower facilities. Also, WPS will provide $300,000 in seed money to fund a study to evaluate the feasibility of a “community digester” project within its service area that would accept manure from nearby farms to be used to generate electricity. Other potential projects include the installation of solar panels on selected community or buildings owned by not-for-profit organizations within its service area.
Settlement still needs federal court approval
The settlement was filed in the U.S. District Court for the Eastern District of Wisconsin, and is subject to a 30-day public comment period and final court approval.
“EPA is committed to protecting communities from the pollution problems that matter most, including reducing air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance, in a Jan. 4 statement about the settlement. “The pollution reductions and the significant investment in local environmental projects under this agreement will ensure that the people of Wisconsin and neighboring states have cleaner, healthier air.”
“This settlement will eliminate thousands of tons of harmful air pollution each year, thus improving air quality in Wisconsin and downwind areas,” said Ignacia Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. “The agreement, which requires WPS to reduce emissions from both of its coal-fired power plants in Wisconsin, demonstrates the Justice Department’s continuing efforts, along with EPA, to bring large sources of air pollution into compliance with the Clean Air Act.”
Reducing air pollution from the largest sources of emissions, including coal-fired power plants, is one of EPA’s National Enforcement Initiatives for 2011-2013, the agency noted. This is the 25th judicial settlement secured by the Justice Department and EPA as part of a national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented, EPA said.