Pollution decision could hit AEP hard

 

Apr 3 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Jack Torry The Columbus Dispatch, Ohio

The Supreme Court yesterday dealt a blow to American Electric Power and other utilities that could force them to pay vast sums in penalties for modifying their oldest coal-fired plants without first installing air-pollution equipment.

In a unanimous decision, the justices concluded that the federal government correctly argued that Duke Energy Corp. violated federal clean-air laws when the company modified eight of its coal-fired plants in North and South Carolina without first obtaining permits from the government.

By doing so, the Clinton administration charged in a 2000 lawsuit, Duke Energy had both extended the lives of those older plants and emitted more air pollution, which would have required them to obtain a permit first. The court rejected Duke's contention that the changes in those plants were not major modifications and thus did not require permits.

The ruling potentially will have a multimillion-dollar impact on the federal government's lawsuit against AEP and nine of its oldest coal-fired plants, including three in Ohio: Muskingum River, Cardinal and Conesville. AEP modified those older plants without first obtaining permits.

U.S. District Court Judge Edmund A. Sargus Jr. delayed his ruling in the case until the nation's high court decided the Duke Energy case. AEP already has spent $5 billion to install modern air-pollution-control devices on most of those plants, but the judge could impose financial penalties on the company for not cleaning the emissions sooner.

"Obviously, we're disappointed in the decision," said Pat Hemplepp, an AEP spokesman. "We have our lawyers looking at it to determine what the impact will be on our existing case."

Frank O'Donnell, executive director of the Washington-based Clean Air Watch, hailed the ruling, saying it "will create pressure" on AEP to reach a settlement with the federal government.

Fred Krupp, president of Environmental Defense, the lead plaintiff in the lawsuit, said in a statement: "This is a huge win for clean air. The court ruled unanimously that companies have to use the latest cost effective technology to reduce pollution when they upgrade their plants. This is not a legal abstraction -- it means we'll have cleaner air and less childhood asthma."

With their ruling, the justices gave at least a partial answer to the contentious issue that has divided the federal government and major utility companies for years.

In the last year of the Clinton administration, the Justice Department accused 10 utilities of trying to modernize 51 of their oldest coal-fired plants without installing costly pollution controls to reduce emissions of sulfur dioxide and nitrogen oxide, blamed for acid rain. Several Northeastern states with acid-rain damage also were parties to the lawsuit.

The companies strenuously insisted they were not rebuilding the plants, providing instead maintenance and minor modifications simply to keep them open as permitted by the clean-air laws.

jtorry@dispatch.com

 

-- A Supreme Court rebuke of the Bush administration could lead to more fuel-efficient cars soon.