Governor And Attorney General Announce New York's Largest Coal Plants To Slash Pollution Levels

Governor George E. Pataki and Attorney General Spitzer today announced two landmark agreements that will dramatically reduce emissions from six upstate coal-fired power plants, including the state's two largest polluting power plants.

Combined, the settlements represent the largest reduction in air pollution levels ever attained through settlement in New York. Together they will reduce NOx emissions by more than 18,000 tons annually – the equivalent of removing 2.5 million cars from New York’s roads. SO2 emissions will decrease by more than 123,000 tons per year – the equivalent of removing every diesel truck and bus operating in the United States.

“These historic agreements will dramatically enhance air quality in New York, improve public health and help preserve the state's greatest natural treasure, the Adirondack Park,” Governor Pataki said. “They are also innovative settlements that will help promote clean energy technologies, preserve open space, and assist lower-income home owners and school districts in New York. New York truly is an environmental leader and these agreements build on the unprecedented progress we’ve made over the last ten years to reduce harmful emissions and protect the air we breathe for future generations.”

Attorney General Spitzer said: “These settlements have enormous benefits for New York and also demonstrate that there is no double standard when it comes to our continuing efforts to protect the environment and public health. Just as we expect out-of-state plants to adhere to the law, we are holding New York's in-state power plants accountable as well.”

Under a settlement of the state’s lawsuit with NRG Energy Inc. (NRG), the company will reduce sulfur dioxide emissions by 87 percent and nitrogen oxide emissions by 81 percent at its Huntley and Dunkirk power plants in Western New York.

In addition, the state has reached an agreement with AES and New York State Electric and Gas Corporation (NYSEG) to reduce emissions at four former NYSEG coal-burning power plants in the Finger Lakes and Southern Tier. Under the terms of the agreement, AES will reduce emissions of nitrogen oxide (NOx) at the four plants by at least 70 percent and sulfur dioxide (SO2) by at least 90 percent.

The Governor and Attorney General thanked each of the companies for working with the state to settle these actions in a way that provides significant environmental and public health benefits.

Under its agreement with the state, NRG will reduce emissions through a combination of installing new pollution controls, switching to cleaner burning low-sulfur coal, and retiring the four oldest and most inefficient units of the Huntley coal plant.

“This milestone agreement signifies NRG's commitment to the State of New York and the environment - it delivers many benefits to the State and its residents, including a faster reduction in emissions than might have otherwise occurred with federal or state legislation,” said David Crane, President and Chief Executive Officer. “NRG is committed to the communities where we live and do business and has worked constructively with New York's Office of the Governor, the Attorney-General and the DEC to achieve major environmental improvements. The settlement provides us with the regulatory certainty that we need to ensure these plants continue to meet consumer demand for electricity, in an environmentally sound manner, into the next decade.”

Michael E. Jesanis, National Grid’s president and chief executive officer said, “We’re pleased to have been able to work cooperatively with Gov. Pataki, Attorney General Spitzer and Commissioner Crotty in reaching a settlement that provides significant economic and environmental benefits to our customers in Western New York and preserves valuable, environmentally sensitive land for all New Yorkers.”

The agreement also requires the previous owner of the plants, Niagara Mohawk Power Corp. (NiMo) to pay a $3 million penalty and provide an additional $3 million to support several environmental benefit projects in Western New York, including weatherizing low-income housing and adding pollution controls to school buses.

NiMo also has agreed to convey 2,500 acres of environmentally sensitive land along the Salmon River to the state. The Oswego County parcel is valued at more than $2.5 million.

As part of its agreement with the state, AES, as the current owner of the plants, will install innovative clean coal technology at its Greenidge Power Plant in the Town of Torrey as a demonstration project approved and partially funded by the Department of Energy. AES will also either shutdown or install new pollution controls at its Hickling facility in Corning, the Westover plant in Johnson City and the Jennison facility in Bainbridge. AES already is utilizing state-of-the-art pollution control equipment at other major facilities in the towns of Barker and Lansing.

In addition, a $700,000 penalty has been assessed against NYSEG, and AES will provide $1 million toward energy efficiency, renewable energy or clean air projects.

Dan Rothaupt, AES Vice-President Responsible For North America East Generation said, “This agreement continues AES' leadership role among its peers in the installation of equipment that improves air quality for the people and environment in New York State. AES is proud to have been the first company in New York State voluntarily to install state-of-the-art pollution control equipment (Selective Catalytic Control) at a large fossil fuel electric generating plant in New York State in 1999 immediately after we purchased our New York fleet of plants. And we are equally proud to continue this cooperative approach with government today.”

In the original lawsuit against NRG and NiMo in 2002, the state charged that NiMo had made major modifications at its Huntley and Dunkirk plants while failing to install the necessary state of the art pollution controls as the law requires, and that NRG, which bought the plants in 1999, also violated the law by continuing to operate the plants without proper pollution controls.

In May 2000, the state identified similar violations by NYSEG at the Westover and Greenidge plants. However, AES agreed to the settlement without being sued by the state.

Under the Clean Air Act, older power plants like those now operated by NRG and AES were exempted from having to comply with the stricter air pollution standards under the New Source Review rules unless they underwent major modifications that increased their pollution. This "grandfathering" was based on the assumption that these plants would be retired and replaced by new cleaner power plants. However, some companies, as alleged in these cases, modified their power plants to extend their life span while claiming that the modifications were routine maintenance and therefore exempt from the stricter pollution control requirements.

Today's settlements build on a national clean air initiative begun by Spitzer in September 1999. The Attorney General, citing Clean Air Act violations, sued eight utilities that operate 17 Midwest power plants. One of those companies, VEPCO, settled in 2003, agreeing to significant reductions in emissions. Cases against companies in Ohio, West Virginia and Indiana, are pending.

Governor George Pataki is recognized as a national leader on air quality issues. During his tenure, New York has implemented the toughest acid rain emission regulations for power plants in the country and has exceeded the requirements of the Clean Air Act by adopting the most stringent standards for new automobiles, and requiring strict emission controls on stationary sources, such as factories and utilities. The Governor also is spearheading a Regional Greenhouse Gas Initiative to develop a flexible, market-based cap and trade program to reduce carbon dioxide emissions from power plants from Maine to Maryland and has called for stronger federal action to further improve air quality.

DEC Commissioner Erin M. Crotty said, “These settlements will have long-lasting benefits for both public health and the environment for generations to come. Under the leadership of Governor Pataki, New York State continues to be a leader in environmental conservation, whether it be protecting hundreds of thousands of acres of open space, or promulgating the toughest acid rain standards in the nation. These latest settlements are evidence of how our aggressive efforts are helping make New York’s environment cleaner, healthier and more protected that ever before.”

Brian L. Houseal, Executive Director of the Adirondack Council, the Park’s largest environmental organization said, “This is a momentous day in the history Adirondack Park. When the state’s two most powerful public officials, from opposing parties, team up to make such dramatic
progress on acid rain, we can only stand in awe and say ‘thank you.’ This agreement is a testament to the importance of the Adirondack Park and to the dire need to stop the acid rain that is killing it. It’s also a testament to the commitment both Governor Pataki and Attorney General Spitzer feel toward the Adirondacks and the entire state’s environmental and public health. The deep emissions reductions resulting from this agreement will have a long-term beneficial impact on the survival rate of the Adirondack Park’s lakes, forests and wildlife. And it will make the simple act of breathing much easier for millions of New Yorkers. We can all be proud of the shining example they have set for the rest of the nation.”

Stanton H. Hudson, Jr., CEO of the American Lung Association of New York State, Inc. said, “We thank Governor Pataki and Attorney General Spitzer for taking this significant step to help protect the health of everyone who breathes in New York State. The agreements reached with these power companies are important legal as well as public health achievements. They will assure that these major polluters will dramatically cut the unhealthful pollution belched from their smokestacks.”

John Adams, president of the Natural Resources Defense Council, said, “Thanks to the leadership of Governor Pataki and Attorney General Spitzer, this historic settlement will lead to huge cuts in urban smog, soot and acid-rain pollution, allowing New Yorkers to breathe easier and enjoy a cleaner environment. Once again, New York State is taking the lead in enforcing this nation's Clean Air Act and showing that we can meet our energy and environmental needs at the same time. We urge the federal government and other states to follow New York in enforcing the Clean Air Act to the fullest extent against every coal-burning power plant that violates the law.”

The Attorney General's office, working with the state Department of Environmental Conservation, previously settled clean air cases with Orange and Rockland Utilities and Mirant, the past and current operators of another in-state plant, in June 2003.

Both the NRG/NiMo and AES/NYSEG settlements are available for public review on the Attorney General's website at www.ag.ny.gov or at the Attorney General's regional office in Buffalo and will be published by the DEC in the Environmental Notice Bulletin.

The cases were handled in the Attorney General's Environmental Protection Bureau by Assistant Attorneys General Peter Lehner, Jared Snyder, Michael Myers, Jacob Hollinger and Marie Chery-Sekhobo. For DEC, the cases were handled by Associate Counsel Michelle Crew and General Counsel James Ferreira with assistance from staff in DEC’s Division of Air Resources.

For more information please contact Jennifer Meicht in Governor Pataki’s Press Office at 518-474-8418 and Marc Violette in the Attorney General’s Office at 518-473-5525.

Attachment:

• Settlement with AES/NYSEG
• Settlement with NRG
  
• Settlement with NiMo

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