Settlement agreement reached on coal ash at Mill Creek power plant

Louisville Gas and Electric (LG&E) and the Sierra Club, represented by Earthjustice, have reached an agreement on the handling of direct discharges from Mill Creek’s ash pond to the Ohio River in southwest Jefferson County, Kentucky.

The parties said a consent decree was filed Sept. 23 with the U.S. District Court for the Western District of Kentucky. LG&E and Kentucky Utilities (KU) are both part of PPL (NYSE:PPL).

Mill Creek is a four-unit coal plant with a total nameplate capacity of more than 1,700 MW, according to GenerationHub records.

Now that LG&E and the Sierra Club have filed a proposed settlement with the Court, the U.S. Department of Justice will have 45 days to review it before the Court can approve.

If approved by the court, this settlement will resolve the active lawsuit between the two organizations over discharged water at LG&E’s Mill Creek Generating Station under a permit issued by the Kentucky Division of Water.

Per the terms of the proposed resolution, which includes no finding or agreement of any violation of law by LG&E and does not involve any fines or civil penalties, LG&E has agreed to:

 •Eliminate the use of a disputed open discharge point to the Ohio River by the end of 2016, with an exception for emergency situations or necessary maintenance; and

• Conduct additional water sampling in the Mill Creek coal ash impoundment by the end of 2016 and submit sampling results to the Kentucky Division of Water.  That sampling will coincide with additional work that LG&E will be undertaking to meet some of the new obligations imposed by the Environmental Protection Agency under its 2015 rule on Disposal of Coal Combustion Residuals. 

In addition, the proposed consent decree memorializes LG&E’s existing plans for closure of the main ash pond at Mill Creek and for the station’s compliance with the EPA’s recently-revised Effluent Limitation Guidelines.  Specifically, those plans include:


•Completing closure of the Mill Creek coal ash impoundment by December 2021; and

•Complying with new Clean Water Act regulations requiring enhanced treatment of wastewater at Mill Creek by 2022, with pilot testing completed by 2017.

Additionally, LG&E has agreed to fund $1 million in environmental enhancement projects focused on tree planting and water quality in the Commonwealth, primarily focused on southwest Jefferson County.  The funding will be administered by The Nature Conservancy, an independent non-profit conservation organization. 

Sierra Club had filed suit in May 2014 

Sierra Club filed this lawsuit in May 2014 to address its concerns relating to the frequency of direct discharges from Mill Creek’s ash pond to the Ohio River and whether LG&E was in compliance with the terms of its permit.

In August 2015, U.S. District Judge David Hale issued an opinion finding that the disputed language in the permit covering such discharges was ambiguous, and asking the parties to present additional evidence before he could interpret it. In that same opinion, Judge Hale directed LG&E and Sierra Club to begin settlement discussions supervised by U.S. Magistrate Judge Dave Whalin. 

One of the first things that the utility will do will be to install a second discharge pipe at Mill Creek no later than Dec. 31, 2016.

LG&E may make a direct discharge from Outfall 002 to the Ohio River as necessary in emergency situations. Emergency situations include circumstances in which LG&E deems it necessary in operating the station to make direct discharges from Outfall 002 in order to prevent overtopping of the impoundments for the Main Ash Pond, according to the decree.

The Kentucky Public Service Commission has already approved certificates for new environmental compliance projects at Mill Creek to help resolve coal ash issues.

“We had a vigorous disagreement over the meaning of certain permit language in this case, but are glad to have reached a resolution that brings this dispute to an end,” said Victor A. Staffieri, chairman, CEO and president of LG&E.

“While we may not always agree with the Sierra Club, we take seriously our commitment to being a good environmental steward while providing low-cost, reliable energy to our customers,” Staffieri said.

“We are pleased that we were able to reach an agreement with LG&E that will help protect water quality in the Ohio River and fund an effort to address other water quality issues in the Mill Creek watershed,” said Judy Lyons, Chair of the Sierra Club Cumberland Chapter. “Going forward, we will continue to encourage the company to focus on expansion of renewable sources of energy as it reduces its reliance on coal.”

In representing the Sierra Club in the lawsuit, Earthjustice attorney Thomas Cmar added, “It’s a good day whenever two opposing sides can see past their differences to reach an agreement that is not only in their best interests but will also provide real benefits to the community,” Cmar said.

“We appreciate LG&E’s cooperation in reaching this settlement, which will improve water quality throughout the Mill Creek watershed,” Cmar added.


About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at