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For Immediate Release:  
For Further Information:
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October 9, 2007  

Lee Moore
609-292-4791

Office of The Attorney General
- Anne Milgram, Attorney General

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AG Announces Settlement of Clean Air Suit Against American Electric
Multi-State Agreement Includes Historic Emission Reductions

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TRENTON – Attorney General Anne Milgram announced today that New Jersey has entered into a settlement agreement with the Ohio-based American Electric Power Service Corp. that resolves allegations the company modified and operated numerous coal-fired electric-generating facilities in violation of the federal Clean Air Act.

According to Milgram, the multi-state agreement will result in major reductions in emissions of sulfur dioxide, nitrogen oxide and particulate matter at 16 coal-fired AEP plants located in Indiana, Kentucky, Ohio, Virginia and West Virginia. In addition to New Jersey and the other participating states, several citizens’ groups and the U.S. Department of Justice worked collaboratively on the AEP litigation.

The settlement encompasses a total of 46 coal-fired, steam-generating units located within AEP’s Eastern power system and, in terms of total emissions reduced, is the single largest settlement of its kind in the nation’s coal-fired power industry history. Ultimately, the agreement will be responsible for eliminating 813,000 tons of air pollutants emitted by the 16 AEP plants by imposing stringent caps on emissions.

In addition to taking steps to reduce plant emissions, AEP must pay a $15 million penalty under the settlement and commit $60 million to developing environmental improvement projects. Of that money, $36 million is earmarked for projects that AEP will either develop itself or have implemented on the firm’s behalf. Another $24 million will be distributed among the participating states, including New Jersey, New York, Massachusetts, Vermont, Connecticut, New Hampshire, Maryland and Rhode Island.

"This is a significant outcome for the quality of life and health of all New Jersey residents," said Milgram. "Over time, New Jersey has taken any number of regulatory steps to reduce its own sources of pollution. However, emissions from upwind, coal-fired plants such as those impacted by this agreement have continued to pose a safety and health threat. This agreement will result in a substantial reduction in those potentially harmful emissions, and at the same time provide funding for projects that are environmentally beneficial."

"New Jersey has steadfastly pursued cleaner air for its residents, including taking tough actions to bring our power plants into compliance with clean air standards," said DEP Commissioner Lisa P. Jackson. "This historic settlement will result in significant reductions of pollutants that blow across our borders, meaning healthier air for all of us."

The environmental improvement projects AEP is required to develop or fund can include – but are not limited to – installation of pollution control technology on buses, ferries and trains, "green" building and appliance efficiency projects, and subsidies for construction of facilities associated with alternative energy sources such as wind and solar.

Under the settlement agreement, sulfur dioxide emissions at AEP power plants will, by the year 2018, have been reduced 79 percent from 2006 levels. Such an emissions cutback represents the largest percentage decrease achieved in any prior government settlement with coal-fired electric utilities in the U.S. Meanwhile, nitrogen oxide emissions from AEP plants included in the settlement will be reduced 69 percent from 2006 levels by the year 2016.

Under terms of the settlement agreement, AEP is required to install and continuously operate flue gas desulfurization devices (commonly referred to as scrubbers) for the control of sulfur dioxide emissions. A Consent Decree memorializing the settlement agreement calls for 14 such scrubbers, which will require a multi-billion-dollar investment by AEP.

AEP will also install and continuously operate selective catalytic reduction (SCR) devices for the control of nitrogen oxides, and will be required to operate existing SCR devices throughout the year instead of during the five-month ozone season. (The ozone season is May, June, July, August and September. It is the time when there is sufficient heat to support the atmospheric processes that lead to formation of ozone from nitrogen oxides. )

Deputy Attorneys General Kevin Auerbacher, Jon Martin and Maurice Griffin of the Division of Law's Environmental Enforcement Section handled the AEP matter on behalf of the State.

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