WASHINGTON: Hoosier Energy Rural Electric Cooperative Inc., an Indiana electric generation and transmission cooperative, has agreed to install state-of-the-art pollution control technology at its two coal-fired power plants in Indiana, the Justice Department and Environmental Protection Agency (EPA) announced on Friday. The settlement, filed in federal court today, will reduce harmful air pollution by more than 24,500 tons per year, and requires Hoosier to pay a civil penalty of $950,000 and spend $5 million on environmental mitigation projects.

The settlement requires Hoosier to reduce air pollution from the cooperative's Merom and Ratts Stations, located in southwest Indiana. Emissions of sulfur dioxide (SO2) will be reduced by almost 20,000 tons and nitrogen oxides (NOx) by more than 1800 tons. The settlement will also reduce harmful sulfuric acid mist and particulate matter emissions. To achieve these reductions, Hoosier will upgrade existing, and install new, pollution controls at the Merom and Ratts plants, and comply with annual tonnage limitations across its system. Hoosier estimates that it will spend between $250 and $300 million upgrading and installing pollution controls at its coal-fired units through the end of 2015.

The state of Indiana joined in the settlement and will receive $100,000 of the $950,000 civil penalty.

"The large reductions in harmful air pollutants including sulfuric acid mist emissions secured by this settlement will have a significant beneficial impact on air quality in Indiana and downwind states," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "The Justice Department is committed to vigorously enforcing our nation's environmental laws, and we are pleased that Hoosier has agreed to install state-of-the art controls that will significantly reduce harmful emissions."

"This settlement continues our important enforcement initiative to reduce harmful air pollution from coal-fired power plants and provide the public with cleaner, healthier air to breathe," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Pollution from these sources can cause severe respiratory and cardiovascular impacts, and are significant contributors to acid rain, smog and haze. Coal-fired power plants of all sizes are large sources of air emissions, and EPA is committed to making sure that they all comply with the law."

Hoosier will spend $5 million on environmental mitigation projects in its service territory to address the impacts of past emissions. Hoosier must direct $200,000 for projects to mitigate the harm caused by Hoosier's excess emissions at lands owned by the U.S. Forest Service. The remaining $4.8 million will be spent on one or more of the following projects:

Coal Bed Methane: Hoosier will capture and combust methane from coal beds to generate at least 10 megawatts of electricity. Carbon dioxide emissions resulting from the combustion of methane will be supplied to a greenhouse for use as a fertilizer.

Wood Appliance Changeout and Retrofits: Hoosier will sponsor a wood-burning appliance changeout and retrofit project. Hoosier will provide incentives through rebates, discounts, and in some instances, actual replacement of old, inefficient, high polluting wood-burning technology.

Clean Diesel Retrofits: Hoosier will retrofit in-service, public diesel engines with emission control equipment designed to reduce air pollutants.

Solar Technologies: Hoosier will install solar power systems on public schools or non-profit groups in the company's service territory.

The settlement marks the federal government's 20th settlement under its national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act's New Source Review requirements. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and the environment. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. SO2 and NOx are also significant contributors to acid rain, smog and haze. In addition, air pollution from power plants can drift significant distances downwind, thereby effecting not only local communities, but also communities in a much broader area.

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