The EPA, Wisconsin Power and Light Company (WPL), and various co-defendants and co-plaintiffs, have entered into a settlement agreement which will significantly alter Wisconsin’s energy generation portfolio and cost over a billion dollars. This action is part of a larger EPA plan to “eliminate or minimize emissions from coal-fired power plants, cement plants, glass plants and acid plants, which have been shown to seriously affect human health and the environment, by ensuring that there are no under-controlled coal-fired electric generating units, cement, acid, or glass plants.”
The settlement, which covers the Columbia, Edgewater and Nelson Dewey coal-fired power plants operated by WPL, also imposes restrictions on Alliant Energy, as WPL’s owner, and Wisconsin Public Service Corporation (WPSC), Madison Gas and Electric Company, and Wisconsin Electric Power Company, as co- and former owners of the units.
WPL currently operates the Columbia, Edgewater and Nelson Dewey coal-fired power plants, all located in Wisconsin, with a total capacity of 1,993 MW. The Columbia Plant consists of two coal-fired electric utility steam generating units identified as Units 1 and 2, with a rated capacity of 512 MW and 511 MW, respectively. The Edgewater Plant consists of three coal-fired units, Units 3-5, with a rated capacity of 60 MW, 330 MW, and 380 MW, respectively. The Nelson Dewey Plant consists of two coal-fired electric utility steam generating units identified as Units 1 and 2, with a rated capacity of 100 MW each. The settlement covers all seven coal-fired boilers at the Columbia, Edgewater, and Nelson Dewey power plants.
Under the settlement, the defendants must invest more than $1 billion in new pollution control technology on the three largest units, continuously operate the new and existing pollution controls, and comply with stringent pollutant emission rates and annual tonnage limitations. The settlement also requires WPL and WPSC to permanently retire, refuel, or repower four additional coal-fired units at the Edgewater and Nelson Dewey plants.
The settlement also requires the defendants to spend $8.5 million on projects that will benefit the environment and human health in communities located near the facilities. According to the EPA:
The WPL Defendants will provide the National Forest Service and the National Park Service each with $260,500 for land restoration projects. Additionally, the WPL Defendants must choose to perform a selection of the following projects: (1) land acquisition and restoration (by an entity other than the FS or NPS); (2) execute a long term major solar photovoltaic (PV) power purchase agreement (PPA) with third-party project developer(s) who will then develop new PV installations; (3) installation of conventional flat panel or thin film solar panels on government or non-profit buildings; (4) wind boost or hydro boost projects (renewable energy resource enhancements) for existing wind farms and hydroelectric facilities; (5) a penstock upgrade project to increase the gross generating capacity of the existing Grandfather Falls hydroelectric facility; (6) development of a community manure digester; (7) compressed natural gas or hybrid fleet replacements; (8) mitigation of the adverse impacts of nitrogen loading in the Yahara River; (9) collection and conversion of separated organics to methane gas for electric generation or vehicle fuel; (10) residential wood appliance change-out program; and (11) energy efficiency enhancements. WPL Defendants will submit a plan to the EPA, for review and approval, identifying which of these projects they intend to perform, the proposed amount(s) to be spent on the projects, and the schedule for implementing the projects.
The United States Forest Service and the National Park Service will each use $250,000 on projects to address the damage done from WPL’s alleged excess emissions. The Forest Service Project(s) will focus on one or more areas alleged to have been injured by emissions from WPL System plants, including but not limited to the Chequamegon-Nicolet National Forest and the Manistee National Forest. The National Park Service Project(s) will focus on one or more areas alleged to have been injured by emissions from WPL System plants, including but not limited to Pictured Rocks National Lakeshore, Sleeping Bear Dunes National Lakeshore, Keweenaw National Historic Park, Apostle Islands National Lakeshore, Mississippi River and Recreation Area, Saint Croix National Scenic Riverway, and Effigy Mounds National Monument. The project(s) will restore areas adversely impacted by the WPL system’s SO2 emissions that resulted, in part, from the deposition of acid rain.
United States Forest Service and the National Park Service Funding for Land Restoration Projects
The United States Forest Service and the National Park Service will each use $260,500 on projects to address the damage done from WPL’s alleged excess emissions. The Forest Service Project(s) will focus on one or more areas alleged to have been adversely effected by emissions from WPL System plants, including, but not limited to, the Chequamegon-Nicolet National Forest and the Manistee National Forest. The National Park Service Project(s) will focus on one or more areas alleged to have been adversely effected by emissions from WPL System plants, including, but not limited to, Indiana Dunes National Lakeshore, Sleeping Bear Dunes National Lakeshore, Mississippi National River and Recreation Area, Saint Croix National Scenic Waterway, Herbert Hoover National Historic Park, and Effigy Mounds National Monument. The project(s) will restore areas adversely impacted by the WPL system’s SO2 emissions that resulted, in part, from the deposition of acid rain.
Land Acquisition and Restoration Project (other than by FS or NPS)
The Land Acquisition and Restoration Project allows WPL to elect to submit a plan to spend up to $1,000,000, and WPS to submit a plan to spend up to $1,100,000, to acquire/donate and restore lands alleged to have been adversely effected by emissions from WPL System plants. Any transfer of property or land interests by WPL to any governmental or nongovernmental organization would be credited at fair market value and must provide for perpetual protection of the land. Restoration may include direct reforestation, particularly of tree species that may be affected by acidic deposition. The EPA has had a number of land acquisition and restoration projects in previous Clean Air Act settlements with utilities.
Major Solar Photovoltaic Development PPA Project
The Major Solar Photovoltaic Development PPA Project allows WPL to elect to submit a plan to spend up to $5,000,000 to execute a long term PPA with one or more third-party project developers who will then develop new solar PV installations to be located in Wisconsin or another state in WPL’s service territory. The PPA will include a term of at least 10 years for which WPL commits to purchase the power generated and, if generated, acquire associated renewable energy credits (RECs) from the solar PV installations. WPL is not allowed to use, and must retire, all RECs generated during the first 10 years of performance and must identify these RECs as retired in a tracking system designated as acceptable by the program recognizing the REC. The consent decree prohibits WPL from using the RECs generated during the initial 10 years of the PPA(s) for compliance with any renewable portfolio standard or for any other compliance purpose during or after the initial 10 years. The project is expected to promote the development of solar energy.
Solar PV Panels Project
The Solar PV Panels Project allows WPL to elect to submit a plan to spend up to $5,000,000, and MGE to elect to submit a plan to spend up to $500,000, to fund the installation of conventional flat panel or thin film solar photovoltaics to create a grid connected on public school buildings and buildings owned by not-for-profit organizations located in WPL’s service territory in Wisconsin. As part of this project, WPL and MGE must each fund a project service contract for maintenance costs for 25 years. If implemented, the project will benefit the local community by reducing the demand for power in an area dominated by coal.
Wind Boost and Hydro Boost Projects
The Wind Boost and Hydro Boost Projects allow WPL to propose a plan to spend up to $2,000,000 to fund projects designed to increase the power production potential of existing wind farms and/or hydroelectric facilities in Wisconsin. Such projects shall be in addition to any other legal obligations, including WPL’s obligations under any state Renewable Portfolio Standard. The intent of the projects would be to increase renewable resource wind and hydro generation facilities, which is expected to offset coal generation.
With regard to the wind farm project, prior to implementation of the project, WPL shall complete a study of equipment, historic production, and wind conditions to customize optimizations and maximize production from individual turbines and from the wind site as a whole. The potential improvements might include a control system upgrade, blade tip extensions, winter icing prevention, turbine pitch optimization, and/or turbine control software.
With regard to the hydroelectric facility project, WPL shall propose a plan designed to increase the existing hydroelectric facility water utilization and energy output. The intent of the project would be to gain electrical energy production from the renewable resource without changing the river flow characteristics. Project activities include improving the water wheel design for increased energy output while maintaining the current river water flow and making control system enhancements to maintain water levels at lower flow rates while continuing electrical generation.
Grandfather Falls Penstock Upgrade Project
The Grandfather Falls Penstock Upgrade Project allows WPSC to submit a plan to spend up to $1,100,000 to replace two 1310-foot-long, 13.5-foot and 11-foot-diameter wood stave penstocks with spiral wound steel penstocks at the existing Grandfather Falls hydroelectric facility. The project is expected to increase the gross generating capacity of the facility by over 400,000 kW hours per year, without changing current river flow characteristics, and to offset coal generation. The $1,100,000 shall act as seed funding for the entire Grandfather Falls Penstock Upgrade Project, which is expected to cost on the order of ten to twelve times that amount. The Grandfather Falls Penstock Upgrade Project shall be in addition to any other legal obligations, including WPS’ obligations under any state Renewable Portfolio Standard. WPS shall not seek to certify any additional capacity resulting from penstock replacement, thereby ensuring additional RECs are not available for sale or use towards any state RPS obligation.
Community Digester Project
The Community Digester Project allows WPL to propose a plan to spend up to $750,000 to fund a project to reduce pollutants through conversion of food and/or animal waste to biogas or electricity within WPL’s service territory. Such a project will promote solutions to the continuing water quality issues posed by phosphorus and nutrient-containing runoff and generate a biogas that would be used to generate renewable electricity for offsite or facility use.
Compressed Natural Gas or Hybrid Fleet Replacement Project
The Compressed Natural Gas (CNG) or Hybrid Fleet Replacement Project allows WPL to submit a plan to spend up to $125,000,000, WPS to submit a plan to spend up to $1,100,000, and MGE to submit a plan to spend up to $250,000, to replace gasoline and diesel powered fleet vehicles located in WPL’s service territory (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured alternative fuels vehicles and/or CNG vehicles. Upgraded fleet vehicles may be owned by the WPL Defendant or may be publicly-owned motor vehicles. Each WPL Defendant shall only receive credit toward Project Dollars for the incremental cost of qualifying vehicles as compared to the cost of a newly manufactured, similar motor vehicle powered by conventional diesel or gasoline engines. The replacement of gasoline and diesel vehicles with alternative fuels vehicles or CNG Vehicles will reduce emissions of NOx, PM, VOCs, and other air pollutants.
Nitrogen Impact Mitigation in the Yahara River Project
The Nitrogen Impact Mitigation in the Yahara River Project allows MGE to elect to submit a plan to spend up to $100,000 to mitigate the adverse impacts of nitrogen loading in the Yahara River, which will have the co-benefit of reducing phosphorus loading and preventing harmful algal blooms. The project could include, for example, creation of forested stream buffers on agricultural land or other land cover to establish a “buffer zone” to filter runoff before it enters the waterway, or installation of fencing to keep livestock out of waters.
Source Separated Organic Waste Project
The Source Separated Organic Waste Project allows MGE to elect to submit a plan to spend up to $100,000 to support a source separated organics project within MGE’s service territory in Wisconsin. The money will be used to develop a program to separately collect organic refuse material (e.g. food waste, soiled paper products, diapers, and pet waste) and convert the separated organics to methane gas for electric generation or vehicle fuel.
Residential Woodstove/Fireplace Change-Out Project
The Residential Woodstove/Fireplace Change-Out Project requires MGE to propose a plan to spend between $75,000 and $250,000 to sponsor a wood-burning appliance change out and retrofit project in Dane county and adjacent counties in Wisconsin. The air pollutant reductions shall be obtained by replacing, retrofitting, or upgrading inefficient, higher polluting wood burning appliances, including fireplaces, with cleaner burning appliances and technologies, such as: (1) retrofitting older hydronic heaters (aka outdoor wood boilers) to meet EPA Phase II hydronic heater standards; (2) replacing older hydronic heaters with EPA Phase II hydronic heaters, or replacing EPA-certified woodstoves with other cleaner burning, more energy efficient hearth appliances (e.g., wood pellet, gas or propane appliances), or EPA Energy Star qualified heating appliances; (3) replacing non EPA-certified woodstoves with EPA-certified woodstoves or cleaner burning, more energy-efficient hearth appliances; (4) replacing spent catalysts in EPA-certified woodstoves; and (5) replacing/retrofitting wood burning fireplaces with EPA Phase 2 Qualified Retrofit devices or cleaner burning natural gas fireplaces. To qualify for replacement, retrofitting, or upgrading, the wood burning appliance/fireplace must be in regular use in a primary residence during the home-heating season, and preference shall be given to replacement, retrofitting, or upgrading wood burning appliances/fireplaces that are a primary or significant source of residential heat. The intent of the projects would be to reduce fine particle pollution and hazardous air pollutants in areas.
Energy Efficiency Projects
WPL, WPS and MGE may each elect to submit a plan to spend up to $200,000 each to reduce criteria pollutants through the purchase and installation of environmentally beneficial energy efficiency technologies designed to minimize the use of electricity and natural gas at state, local, or tribal government-owned buildings, schools and/or buildings owned by nonprofit organizations within WPL’s service territory.
The utilities will also be assessed a civil penalty of $2.45 million for alleged violations of the clean air act.
According to an article in the Milwaukee Journal Sentinel, “Utility ratepayers won’t have to pay for the civil penalties, [Steve] Schultz [a spokesman for WPL] said. But it’s possible they could pay for the environmental mitgation [sic] costs…And over time they will be on the hook for paying for the construction of environmental controls at the coal boilers that will remain open.”
This is the 26th judicial settlement secured nationally by the Justice Department and EPA as part of a national enforcement initiative to control harmful emissions from power plants under the CAA’s New Source Review requirements.
As part of the Power Plant Initiative, the EPA began an investigation of the WPL system in 2008. Based upon WPL’s response to the EPA’s CAA Section 114 Information Requests and other information obtained during its investigation, EPA concluded that there were PSD violations at some of WPL’s plants. On December 14, 2009, EPA issued a Notice of Violation to WPL generally alleging that WPL performed projects that triggered PSD applicability at the Columbia, Edgewater, and Nelson Dewey plants. The EPA also alleged violations of Title V of the CAA for failure to submit an application to include all applicable requirements in WPL’s Title V permits. The parties initiated settlement discussions in 2010 after the Sierra Club filed a suit against WPL seeking more aggressive restrictions.
This is the fourth such EPA action impacting Wisconsin generators. The EPA reached similar deals last year with Wisconsin Public Service and Dairyland Power Cooperative, and a federal judge approved a similar settlement for We Energies in 2007. A look at the EPA’s enforcement map suggests it will also not be the last.
The proposed settlement, lodged in the U.S. District Court for the Western District of Wisconsin, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.
Settlement Agreement filed with the court, April 22, 2013
WPL/Alliant Energy Press Release, April 22, 2013
Sierra Club Press Release, April 22, 2013
EPA/Dept. of Justice Press Release, April 22, 2013
This post, authored by Emily Kelchen, origionally appeared on the Great Lakes Legal Foundation’s Regulatory Watch website.