AIR POLLUTION:

Duke ordered to close coal-fired units at Ind. plant

A federal judge in Indianapolis has ordered Duke Energy Corp. to shut down nearly 40 percent of an Indiana power plant's capacity as part of an enforcement case that dates back to the Clinton administration.

Judge Larry McKinney of the U.S. District Court for the Southern District of Indiana ordered Duke last Friday to shut down three units at its Wabash River Station in West Terre Haute no later than Sept. 30. The judge also ordered Duke to run those units at a reduced rate until they are closed and to surrender pollution allowances to account for the plant's sulfur dioxide emissions.

Shutting down the three units at Wabash River Station will remove a combined capacity of 265 megawatts -- 39 percent of the plant's 677-megawatt capacity, according to Duke. The company had proposed a remedy that would have retired the three units by 2012.

Duke will also be required to pay a fine of nearly $690,000 and install emission monitoring devices at its Beckjord plant near Cincinnati.

The order comes in response to last year's ruling that the plant's previous owners had violated federal rules governing power-plant modifications. Justice Department lawyers -- joined by plaintiff-intervenors from New York, New Jersey and Connecticut and two environmental groups, had argued that Cinergy Corp. -- which merged with Duke in 2006 -- had made illegal modifications to the plants in the 1980s and 1990s (E&ENews PM, May 22, 2008).

Ann Weeks, senior counsel for the Clean Air Task Force, an advocacy group that represented the Ohio Environmental Council and the Indiana-based Hoosier Environmental Council, welcomed the judge's order. "We are very glad that those downwind from the Wabash plant will begin to breathe a little easier, almost immediately, as a result of this decision," she said.

Duke officials expressed disappointment with the court's order to shut down the units at the accelerated pace but said that the decision would not significantly affect its 2009 operations.

"[E]ven though disappointed, I will reiterate our satisfaction that after 10 years of litigation, the company's position regarding power plant projects was vindicated in the vast majority of instances about which the government originally complained," Duke's chief legal officer, Marc Manly, said in a statement.

James Turner, president and chief operating officer of Duke's franchised electric and gas segment, said the company had already begun to change its operating plans following the jury's verdict last year. "However," he said, "we will have to re-evaluate our plans for meeting peak demand the next two summers and work with the Midwest Independent System Operator to ensure we have an adequate plan for the reliable operation of the system."

The decision resolves one of the last remaining claims in an enforcement case that began as part of the Clinton administration's aggressive legal campaign against coal-fired utilities violating the Clean Air Act's New Source Review provisions.

A jury in the U.S. District Court for the Southern District of Indiana found last month that Cinergy violated NSR provisions when it replaced coal pulverizing equipment at two units at its Gallagher Station in Floyd County, Ind. The court has not yet issued a remedy order for those violations (Greenwire, May 21).

Click here to read the court order.

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