AEP SETTLES ACID RAIN LAWSUIT FOR $4.6 BILLION

(10/10/2007)
The effects of acid rain on life in America have long been minimized by coal burning power plants and other industries.

Now, American Electric Power is settling an eight-year legal battle, agreeing to pay billions of dollars to limit one type of pollution.

AEP, based in Columbus, Ohio, will spend $4.6 billion dollars to reduce chemical emissions blamed for spreading acid rain across the Northeast.

AEP will clean up coal-fired operations in 16 plants in its eastern system. Those likely will include plants in Ohio, Indiana, Virginia and West Virginia.

The agreement was filed Tuesday in federal court in Columbus as a six-week trial was about to begin.

AEP CEO Michael Morris calls the settlement an excellent outcome for shareholders, saying it eliminates the financial risks of a prolonged court fight.

AEP will also be required to reduce the emissions by at least 69 percent over the next 10 years and pay an additional $15 million in civil penalties and $60 million in cleanup and mitigation costs to help heal polluted parkland and waterways.

The agreement is linked to one of the largest government fines in any environmental case, a case that has infrequently been reported in main-stream media.

Exxon Mobil Corp. estimates it has paid $3.5 billion in cleanup costs, government settlements, fines and compensation for the 1989 Exxon Valdez oil spill. The company is fighting an additional $2.5 billion in punitive fines.

Valdez residents claim the clean-up was mishandled and never completed.

The Vermont lawsuit, brought in 1999 accused the energy company of rebuilding coal-fired power plants without installing pollution controls as required under the Clean Air Act.

Environmentalists blame acid rain caused by coal-fired power plants for plaguing the Northeast over the last quarter-century, including damage that has eaten away at the Statue of Liberty.

Smog and acid rain have been linked to sulfates and nitrates that are products of coal-fired plants, pollution that affects human health, woods, air and water.

There are at least nine AEP plants in Ohio, Indiana, Virginia and West Virginia.

The settlement of an environmental lawsuit against American Electric Power will have little to no impact on West Virginia's coal-fired power plants, according to AEP.

AEP Spokesman Phil Moye said "It really doesn't have much of an impact on our plants in West Virginia, because the settlement actually includes actions we had already taken or were planning to take to reduce emissions at our West Virginia plants."

Those actions include the installation of coal scrubber systems at the Mountaineer plant in Mason County and the Mitchell Plant in Marshall County. Those upgrades have been completed.

There is currently a $1 billion dollar investment underway to install pollution control devices at the enormous John Amos Power plant near Winfield.

"The great thing about the environmental upgrades at our plants is that it allows us to continue to use West Virginia coal to make electricity and it allows us to do it much more cleanly than we have in the past," said Moye.