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November 2007

American Electric Power agrees to largest single settlement ever

American Electric Power (AEP) has agreed to cut 813,000 tons of air pollutants annually at an estimated cost of more than $4.6 billion, pay a $15 million penalty, and spend $60 million on projects to mitigate the adverse effects of its past excess emissions. The record settlement was announced by the Department of Justice and the Environmental Protection Agency (EPA).

This is the single largest environmental enforcement settlement in history.

“The AEP settlement will have an unprecedented impact on air quality in the eastern United States,” said Ronald J. Tenpas, acting assistant attorney general for the Justice Department’s Environment and Natural Resources division.

An unprecedented coalition of 8 states and 13 citizen groups joined the United States government in this settlement. The agreement imposes caps on emissions of pollutants from 16 plants located in 5 states. The facilities are located in Moundsville, St. Albans, Glasgow, and New Haven, West Virginia; Louisa, Kentucky; Glen Lyn and Carbo, Virginia; Brilliant, Conesville, Cheshire, Lockburne, and Beverly, Ohio; and Rockport and Lawrenceburg, Indiana.

The AEP will install pollution control equipment to reduce and cap sulfur dioxide and nitrogen oxide emissions by more than 813,000 tons per year when fully implemented. By installing these pollution control measures, the plants will emit 79 percent less sulfur dioxide and 69 percent less nitrogen oxides, as compared to 2006 emissions.

The settlement resolves a lawsuit filed against AEP in 1999, alleging the company violated the New Source Review requirements of the Clean Air Act.

The company will spend an additional $60 million to finance and conduct projects to mitigate the impact of past emissions. Of the total, $24 million for these projects will be allocated among the states that joined the settlement. The remaining $36 million will be spent on mitigation projects identified in the settlement agreement.