Duke Energy, one of the largest electric power companies in the United States, will spend approximately $85 million to reduce air pollution at an Indiana power plant and pay a $1.75 million civil penalty, under a settlement to resolve violations of federal clean air laws, according to a report by the Justice Department and the U.S. Environmental Protection Agency (EPA). The settlement also requires Duke to spend $6.25 million on environmental mitigation projects.

The agreement, filed in federal court in Indianapolis, resolves violations of the Clean Air Act’s new source review requirements found at the company’s Gallagher coal-fired power plant in New Albany, Ind., located directly across the Ohio River from Louisville, Ky.

The settlement is anticipated to reduce sulfur dioxide emissions at the Gallagher Plant by almost 35,000 tons per year, an 86 percent reduction when compared to 2008 emissions.

Duke is required to spend $6.25 million on environmental mitigation projects, including $250,000 for the U.S. Forest Service to address acid rain in downwind national forests, $5 million for one or more additional projects such as conversion to hydro generation or hybrid vehicle fleets, and $1 million for environmental mitigation projects to be allocated among the states that joined the settlement.

The settlement requires Duke to either repower Units 1 and 3 at Gallagher with natural gas or shut them down to remove all sulfur dioxide pollution. This natural gas repowering will also reduce other air pollutants, including nitrogen oxides, particulate matter, mercury, and carbon dioxide. The combined nitrogen oxide emissions from Units 1 and 3 are expected to decrease by about 2,198 tons per year as compared to 2008 emissions. By using natural gas rather than coal, Duke will eliminate emissions of particulate matter and mercury from the units. The switch from coal to natural gas will also decrease these units’ carbon dioxide emissions by roughly half per unit of electricity.

The settlement also requires that Duke install new pollution controls for sulfur dioxide at the other two units at the plant, Units 2 and 4. The work and projects that are required by the settlement will, when fully implemented, result in substantial improvements to the air quality for the communities that are the most heavily impacted by the Gallagher Plant’s emissions.

This is the 17th settlement secured by EPA and DOJ as part of a national enforcement initiative to control harmful emissions from coal-fired 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 nearly 2 million tons each year once all the required pollution controls have been installed and implemented.

Sulfur dioxide and nitrogen oxides can cause severe harm to human health and the environment, according to the EPA. After being emitted from power plants, these pollutants are converted to fine particles of particulate matter that can lodge deep in the lungs, causing a variety of health impacts including premature death. Sulfur dioxide and nitrogen oxides are also significant contributors to acid rain, smog, and haze, which impair visibility in national parks Air pollution from power plants can travel significant distances downwind, crossing state lines and creating region-wide health problems, according to the EPA.