Posted by: Lawyer Sanders | February 3, 2009

Environmental lawyer Sanders says KU agrees to $136.4 million settlement with EPA that signals utility rate hikes for thousands of Kentucky families for many years to come!

E.ON U.S., headquartered in Louisville, Kentucky, owns and operates Louisville Gas and Electric Company, a regulated utility that serves 318,000 natural gas and 390,000 electric customers in Louisville and 16 surrounding counties, and Kentucky Utilities Company (“KU”), a regulated electric utility in Lexington, Kentucky, U.S.A., that serves 518,000 customers in 77 Kentucky counties.

 

KU 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, the Department of Justice and the U.S. Environmental Protection Agency announced today. This is a huge amount of money that KU’s rate payers will wind up paying for many years to come.   Hello, Public Utility Commission in Frankfort, we have a problem!

KU has agreed to install new pollution control equipment on its largest generating unit that will 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. 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 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.

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 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.

Coal-fired plants release sulfur dioxides and nitrogen oxides, which are a primary cause of acid rain that harms trees and lakes and impairs visibility. These pollutants cause severe respiratory problems, contribute to childhood asthma, and contribute to smog and haze. Air pollution from power plants can drift significant distances downwind and degrade air quality in nearby areas.

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.

More information on the settlement:

www.epa.gov/compliance/resources/cases/civil/caa/kucompany.html

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