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Plants in South to Cut Emissions That Produce Smog in Northeast

By RICHARD PÉREZ-PEÑA

November 16, 2000

Virginia power company, accused of violating clean-air standards and contributing to acid rain and smog in the Northeast, has agreed to a landmark legal settlement requiring that it cut emissions from eight coal-burning plants by 70 percent.

Government officials hope that the agreement will set a precedent to be followed by other power companies across the Midwest and the South.

"This is the single greatest air pollution reduction ever achieved from a utility," said Carol Browner, administrator of the United States Environmental Protection Agency.

The pollutants emitted by the eight plants, which are owned by the Virginia Electric Power Company, include sulfur dioxide, which causes acid rain, and nitrogen oxides, which contribute to ozone, or smog.

The eight plants emit about as much of these two pollutants as all 30 electric power plants in New York State combined. The company has agreed to reduce these emissions by 70 percent, or 252,000 tons per year, within 12 years.

The amount the company has committed to spend to clean up its plants — $1.2 billion — also sets a record for actions brought under the federal Clean Air Act.

The agreement stems from groundbreaking legal actions filed last year, first by the New York State attorney general, Eliot L. Spitzer, and then by the E.P.A., against power companies in the Midwest and the South. Some of the other companies are also in settlement negotiations with the state and federal governments, officials said.

If Virginia Electric is merely the first of several dominoes to fall, the effects would be far-reaching, since Virginia Electric is far from the biggest polluter among power producers.

The suits against the companies and the agreement with Virginia Electric established a number of legal firsts. Mr. Spitzer's action marked the first time any state had sued a polluter in a different state for violating the federal Clean Air Act. "This is a critical affirmation of the role that states can play in not only environmental enforcement, but also the broader range of enforcement issues where states have compelling interests that are not always pursued by other levels of government," Mr. Spitzer said. "I hope that this deal will be a template for other settlements."

Ms. Browner and Mr. Spitzer plan to make a formal announcement today of an "agreement in principle" with the company, with a final settlement to be signed within 60 days.

In addition to reducing nitrogen oxides and sulfur dioxide, Virginia Electric will cut particulate emissions, or soot, at the eight plants, which are all in Virginia and West Virginia. The company has also agreed not to sell or trade to other companies the "pollution credits" it earns by cutting its own emissions, so that its cleanup will not lead to other companies' gaining legal permission to pollute more.

Sulfur dioxide, produced mainly by burning coal, is the primary cause of acid rain and acid snow, which threaten the health of Adirondack forests and lakes. Nitrogen oxides break down in hot weather and help form lung-damaging ozone, or smog, especially in urban areas like New York City, and they also contribute to acid rain and snow. Soot is a factor in a number of respiratory ailments, including asthma.

Environmentalists hailed the deal as one of the most important steps ever taken against an industry that is a major source of air pollution. "This is huge, and we think it drives other companies to the bargaining table, which would produce massive reductions," said Peter M. Iwanowicz, director of environmental health for the American Lung Association of New York State.

The downside of the agreement with Virginia Electric will affect its shareholders and possibly its customers, who may see higher electricity rates.

Scientists have known for years that while the Northeastern states have some of the nation's toughest emissions rules, much of their pollution blows in on the prevailing winds from other states where standards are more lax. The states and the E.P.A. have been trying, without success, to reach an agreement for Midwestern and Southern states to reduce their output of nitrogen oxides.

Mr. Iwanowicz said that if all the Midwestern and Southern power companies made the reductions that Virginia Electric has agreed to, it could put the New York metropolitan region into compliance with the ozone health standards that it routinely violates on hot summer days.

The Clean Air Act, passed in 1970 and amended in 1977, imposed pollution standards on power plants, but it exempted plants built by 1970 from those rules, under a grandfather clause. Plants that predate the act, particularly those that burn coal, often produce hundreds of times as much pollution as new plants. The federal law states, however, that when major improvements are made to an old plant, it becomes subject to the same emissions standards as a new one.

The state and federal suits charged that power companies with old plants had been significantly expanding and upgrading them, but reporting to the federal government that the work was nothing more than routine maintenance.

While some environmentalists had grumbled that the grandfather clause was being abused, no one had ever sued on that basis until last year. Mr. Spitzer sent investigators to the states where the old plants were situated to research the documents that the companies had filed describing in detail the plant improvements. The filings were required by state regulators to justify rate increases.

In September 1999, Mr. Spitzer either sued or warned of his intent to sue the owners of 17 coal-burning power plants in five states, under a Clean Air Act provision that allows any citizen to sue for violations of the act. Several other Northeastern states then joined in some of his suits. The list of 17 included the two largest plants owned by Virginia Electric, but in negotiations with the company the settlement was expanded to cover all of its eight coal-fired plants.

The E.P.A. followed with similar moves — either lawsuits or administrative enforcement actions — against more than 100 plants across a much wider swath of the country. Earlier this year, the Tampa Electric Company reached an agreement with the E.P.A. that marked the first settlement under a suit charging that a company, in effect, had hidden behind the grandfather clause. The larger Virginia Electric agreement is the second such settlement.