Cinergy Agrees to $1.4 Billion Settlement

Cinergy will pay $1.4 billion to settle the largest enforcement action ever taken under the Clean Air Act, according to the Justice Department.

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The Department of Justice (DOJ), EPA and a major electric utility, Cinergy Corp., have agreed on a $1.4 billion settlement. The enforcement action, the largest ever taken under the Clean Air Act settles allegations that Cinergy''s coal-fired power plants illegally polluted the air.

Coal-fired power plants collectively produce more pollution than any other industry in the United States.

Nearly four years ago, EPA began an investigation of coal-fired power plants, including those owned by Cinergy.

The federal government in November 1999 filed suit against several electric utilities, including Cinergy, charging that they violated the law by making major modifications to their power plants without installing equipment required to control smog, acid rain and soot.

The settlement includes an $8.5 million fine, but most of the estimated $1.4 billion will be spent on environmental improvements at Cinergy plants.

The agreement by Cinergy involved 10 coal-burning power plants operated by PSI Energy in Indiana and Cincinnati Gas & Electric Co., in Ohio.

According to EPA, the agreement will result in substantial pollution reduction from one of the largest and most coal-dependent utilities in the nation, reducing sulfur dioxide emissions by 400,000 tons per year and nitrogen oxide by 100,000 tons per year.

Cinergy is expected to spend $1.4 billion to install permanent emissions-control equipment to meet stringent pollution limits; implement a series of interim pollution-reduction measures to reduce emissions while the permanent controls are designed and installed; decrease the amount of pollution released from its plants; and retire pollution emission allowances that Cinergy could have otherwise used to emit additional pollution.

In addition to Cinergy, DOJ has brought legal action for Clean Air Act violations against American Electric Power, FirstEnergy, Illinois Power, Southern Indiana Gas & Electric Co., the Southern Co. and the Tampa Electric Co.

With the exception of the Tampa Electric Co., these lawsuits continue.

In February, DOJ and EPA reached a $1 billion agreement to settle Clean Air Act charges with the Tampa Electric Co.

by Virginia Sutcliffe

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