Kentucky Utilities (KU, www.kuenergy.com), a coal-fired electric utility, has agreed to pay a $1.4 million civil penalty and spend approximately $135 million on pollution controls to resolve violations of the Clean Air Act, according to the Department of Justice (ww.doj.gov) and the U.S. Environmental Protection Agency (EPA, www.epa.gov).

As part of the settlement, KU has agreed to install new pollution control equipment on its largest generating unit. The upgrade is projected to reduce combined emissions of sulfur dioxide and nitrogen oxides by more than 31,000 tons per year, which is 90 percent below the 2007 emission levels, according to the EPA. KU will also install controls to reduce particulate matter emissions by approximately 1,000 tons per year.

KU will spend approximately $3 million on projects to benefit the environment and mitigate the adverse effects of the alleged violations including:

Contribute $1.8 million to a pilot project on the effectiveness of storing compressed carbon dioxide gas, a by-product of coal combustion, in deep injection wells;
Spend $1 million to retrofit school buses with filters or other controls to reduce emissions of particulate matter; and
Pay $200,000 to the National Park Service to help restore Mammoth Cave National Park.

KU has also agreed to surrender the excess nitrogen oxide and sulfur dioxide allowances it will have after installing the pollution controls. Coal-fired power plants are allowed to emit sulfur dioxide and nitrogen oxides as allowances, which are granted under federal or state acid rain permits. Once surrendered, these allowances cannot be used again, thus removing the emissions from the environment permanently.

In a complaint filed in March of 2007, the government alleged that KU modified the largest coal-fired electrical generating unit at the E. W. Brown Generating Station in Mercer County, Kentucky, without installing required pollution control equipment or complying with applicable emission limits, in violation of the Clean Air Act. The unit has been operating since 1971, and the modifications made in 1997 allowed the unit to increase the amount of coal it burned and increase the amount and rate of emissions for sulfur dioxide, nitrogen oxide and particulate matter. The government discovered the violations through an information request submitted to KU, according to the EPA.

The settlement is part of the EPA’s enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. The EPA estimates total combined sulfur dioxide and nitrogen oxide emission reductions secured from these settlements will exceed more than 1.8 million tons each year once all the required pollution controls have been installed and implemented.

Kentucky Utilities, based in Lexington, Kentucky, generates and distributes electricity to more than 500,000 customers in Kentucky and Virginia. It owns and operates five coal-fired electrical generating stations in Kentucky. The settlement applies to the largest boiler unit at the E.W. Brown Generating Station located on Lake Herrington in Mercer County, Kentucky.

The proposed settlement was lodged in the U.S. District Court for the Eastern District of Kentucky in Lexington and is subject to a 30-day public comment period and final court approval.

For more information on this settlement, visit
www.epa.gov/compliance/resources/cases/civil/caa/kucompany.html.