In a case begun immediately after the Obama administration took office – under New Source Review rules that have not been enforced for over a decade, a Kansas coal power company has just settled with the newly activist EPA led by Lisa Jackson.
Under the settlement, Westar Energy has agreed to pay a $3 million fine and must now spend $500 million to correct its longstanding violations of the Clean Air Act.
Like all plants that came into operation after 1977: Westar Energy’s Jeffrey Energy Center, built in 1978, was subject to stricter SOx and NOx requirements than older plants, under New Source Review. However, with lax enforcement, the company was able to skirt the law with impunity, and continue to pollute.
“Today’s settlement sets the most stringent limit for sulfur dioxide emissions ever imposed on a coal-fired power plant in a federal settlement,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to protecting clean air for communities by making sure coal-fired power plants comply with the law.
In addition, under the EPA-administered cap and trade program that has been in place to reduce SOx and NOx emissions from pollution sources, Westar will surrender the surplus SOx allowances for the 78,600 tons of health-endangering pollution removed with the scrubbers.
These SOx allowances cannot be used again, which means that the harmful emissions are permanently removed from the environment.
The plant also produces over 16 million tons of CO2 annually. Current EPA-administered cap and trade covers only SOx and NOx emissions, but that will likely change, if congress fails to pass its own cap and trade bill (that has only passed the Democratic-majority House; as Waxman-Markey ACES).
In addition, Westar must spend $6 million on clean energy projects. Perhaps to kindle its interest in clean power: it must install small wind turbines at a local school. After all, $500 million could build a new 250 megawatt wind farm. It must also retrofit diesel engines with emission controls, install charging infrastructure, purchase plug in hybrid vehicles and install charging at truck stops to prevent engine idling.
The ruling covers three power plants producing a combined 2,160 megawatts, which comprises 73 percent of the company’s coal-powered electricity. With the $500 million pollution scrubbers, the total combined sulfur dioxide and nitrogen oxide emissions will be reduced more than 78,600 tons a year or more than 85%.
The new administration crackdown was no surprise. Westar had reassured worried shareholders in December of 2008 that “We believe that costs related to updating or installing emissions controls would qualify for recovery in the prices we are allowed to charge our customers.” Currently residential customers in Kansas pay an average $77 a month for electricity, and a $1 rate increase was just approved by the Kansas utility regulators to pay for building new wind farms.
Westar shares closed down 12 cents on news of the settlement.