State of New Jersey resolves Clean Air Act lawsuits in $337 million settlement

Pollution control projects to be completed by 2012

Washington, DC, Jan. 24, 2002 — The Environmental Protection Agency (EPA) and the Justice Department have reached a $337 million air pollution settlement with the state of New Jersey, resolving Clinton-era lawsuits for two coal plants.

The settlement came a few days after the Justice Department said it would continue with lawsuits against the owners of 51 coal-burning power plants, EPA said.

The Clean Air Act lawsuits, filed by the Clinton administration in 1999, had been on hold while the Bush administration reviewed whether they were necessary.

According to the settlement, PSEG Fossil LLC will have to spend more than $337 million to install new pollution controls to eliminate most of the sulfur dioxide and nitrogen oxide released from the Mercer and Hudson plants in Jersey City and Hamilton, N.J.

Specifically, the company will have to cut annual emissions of sulfur dioxide from the two plants by 36,000 tons, and nitrogen oxide emissions will have to be reduced by 18,000 tons.

The combined effect of the pollution controls will reduce the company’s emissions of sulfur dioxide (SO2) by 90 percent and its emissions of nitrogen oxides (NOx) by more than 80 percent.

These decreases represent 32 percent of all the SO2 and 20 percent of all the NOx emitted from stationary sources in New Jersey, and 19 percent of all the SO2 and 5 percent of all the NOx from all sources in the state, including cars and trucks.

The settlement lodged today with the United States District Court in Newark resolves federal and state allegations that the Hudson and Mercer plants are unlawfully operating because they were modified without installing necessary pollution controls and obtaining proper permits required by the “New Source Review” program of the Clean Air Act.

At the Hudson and Mercer stations PSEG Fossil will install flue gas desulfurization devices (scrubbers), which use the control technology capable of removing SO2 from power plant emissions, and selective catalytic reduction systems (SCR) to control NOx.

The company will also undertake a program at both stations to upgrade the effectiveness of its existing control devices for particulate matter (PM) and will install one additional particulate control device which will eliminate over 1,000 tons per year of that pollutant.

In addition, the company will retire pollution emission allowances and credits that PSEG Fossil or others could use to emit additional pollution into the environment.

“PSEG negotiated in good faith and demonstrated a willingness to put litigation considerations aside and to act quickly to improve the health of New Jersey’s citizens and the quality of air they breathe. We hope other utilities follow PSEG’s lead,” said Tom Sansonetti, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

Sulfur dioxide and NOx are significant contributors to acid rain; NOx also increases low level ozone which causes smog; fine particulate matter causes haze. All of these pollutants cause severe respiratory problems and exacerbate cases of childhood asthma.

Given the significant expense and engineering complexity of the work agreed to by PSEG Fossil, installation of the controls will be in phases beginning with optimization of PM controls in 2002, installation of SCRs beginning in 2004, and installation of scrubbers beginning in 2006. All work will be complete by 2012.

In addition to the pollution reductions secured by the settlement, PSEG Fossil has agreed to pay a civil penalty of $1.4 million and to spend at least $6 million on three additional projects that will partially offset the impact of past emissions: it will take steps to reduce its emissions of carbon dioxide by 15 percent; contribute to New Jersey’s ongoing efforts to recover and use methane gas from landfills; and develop technology to reduce and monitor emissions of mercury from its plants.

This settlement is the latest in a series of cases that the Administration has undertaken to bring the power plant industry into full compliance with the Clean Air Act.

Today’s announcement represents the second judicial settlement under the power plants enforcement effort; the first settlement being with Tampa Electric Company in January 2001.

EPA has also entered into agreements in principle with Cinergy and Virginia Electric Power Company. In a related announcement last week the Justice Department concluded that EPA’s New Source Review enforcement actions are consistent with the Clean Air Act and its regulations.

Today’s settlement is subject to a 30-day public comment period and final court approval by a federal judge in Newark, N.J.

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