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Power Company Agrees To Settle Acid Rain Case

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By DEVLIN BARRETT, The Associated Press

Published: October 10, 2007

Updated: 10/09/2007 11:11 pm

WASHINGTON - A $4.6 billion settlement on Tuesday by one of the last holdouts among polluting power companies signals the end of a long legal debate over acid rain - and a tougher battle ahead over carbon dioxide and the use of fossil fuels.

The agreement with American Electric Power Co., struck just as the company was to defend itself in court, ends an eight-year battle over reducing smokestack pollution that drifted across Northeast and mid-Atlantic states and chewed away on mountain ranges, bays and national landmarks.

Government officials praised the deal as the largest environmental settlement in the nation's history.

AEP, based in Columbus, Ohio, maintains it never violated Clean Air Act rules to curb emissions and that it had spent or planned to pay $5.1 billion on scrubbers and other equipment to reduce its pollution.

'Plans change,' said acting Assistant Attorney General Ron Tenpas, announcing the settlement filed in U.S. District Court in Columbus. 'And obviously there is a big difference between a company saying it has plans to do something in the future and a company being bound by an order of the court to take those steps.'

AEP also must pay a $15 million civil fine and $60 million in cleanup and mitigation costs to help heal polluted land in Shenandoah National Park and waterways, including Chesapeake Bay.

In all, the costs and civil fines will far exceed any company payout in an environmental case, the attorneys said. The 1989 Exxon Valdez oil spill, by contrast, yielded $1 billion in restoration and restitution costs, although Exxon Mobil Corp. estimates it has so far spent $3.5 billion and faces an additional $2.5 billion in criminal penalties.

New York Gov. Eliot Spitzer, who as the state's attorney general hounded AEP and other pollution-spewing power companies, said AEP finally conceded to legal, scientific and political pressure.

'The debates over acid rain to a certain extent have been resolved,' said Spitzer, a Democrat. 'Carbon is the real issue now. Do we have to move away from all fossil fuels? These are tough issues, from a policy standpoint and an economic standpoint.'

John Walke, an attorney for the Natural Resources Defense Council, an environmental group involved in the case, said Tuesday's success is a blueprint for confronting global warming.

'Many people have compared where we are now with global warming to where we were with acid rain in the 1980s,' Walke said. 'We are following the road map from the acid rain era.'

The case against AEP began in 1999 when eight states and 13 environmental groups joined the Environmental Protection Agency's crackdown on energy companies accused of rebuilding coal-fired power plants without installing pollution controls as required. In states such as New York, officials complained that acid rain linked to sulfates and nitrates from coal-fired plants were eating away at landmarks, including the Statue of Liberty.

AEP has more than 5 million customers in 11 states. In a statement Tuesday, Chief Executive Officer Michael G. Morris noted the settlement did not find AEP guilty of violating the Clean Air Act but willing 'to consider ways to reasonably resolve these issues.'

As part of the settlement, AEP will clean up 46 coal-fired operations in 16 plants in Ohio, Indiana, Kentucky, Virginia and West Virginia. Morris noted the risk of AEP paying a far greater fine if it had fought the case in court and lost.

AEP said it has paid nearly $2.6 billion since 2004 on equipment to cut emissions in coal-fired plants in Kentucky, Ohio, Virginia and West Virginia.

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