AIR POLLUTION:

Obama, Ill. file NSR lawsuit against Midwest Generation

The Obama administration and the Illinois attorney general filed a lawsuit today against a Midwestern energy company for alleged Clean Air Act violations at six coal-fired power plants, including five in the Chicago area.

The 38-count complaint said Midwest Generation made major modifications at the facilities without also installing the proper pollution control equipment, efforts that have led to unsafe air quality in the region, including high levels of ground-level ozone and soot that are linked to asthma and other respiratory ailments.

"EPA's first priority is to protect the health of the people who live near these six plants and are most exposed to their pollution," said Bharat Mathur, the acting chief of the U.S. EPA regional office in Chicago. "Today's filing is a significant step toward improving the air quality not only of the communities in the shadow of these plants but for those downwind of their emissions as well."

Midwest Generation has long been the subject of state and federal scrutiny for violating the Clean Air Act's New Source Review program, as well as other provisions of the law.

In December 2006, the company reached an agreement with Illinois EPA that put it on track to reduce mercury, nitrogen oxides and sulfur dioxide emissions over the next decade. But EPA under President George W. Bush wasn't satisfied, and it filed a notice of alleged violations in August 2007 that laid the groundwork for today's suit (Greenwire, Aug. 7, 2007).

Midwest Generation spokesman Doug McFarlan said today that the company remains open to a settlement with the governments. At the same time, McFarlan insisted that the existing agreement with Illinois should be enough to resolve any concerns, and he cited earlier agreements reached by other coal-fired electric utilities surrounding similar allegations.

"These are regulations which we find are as tough, or tougher, than other companies that have reached with the government," McFarlan said. "We've got a record of performance and future requirements that we're prepared to vigorously defend as necessary."

The power plants subject to the latest court challenge have a combined capacity of more than 6,000 megawatts. The Chicago-area plants include Crawford Station, Fisk Station, Joliet Station, Waukegan Station and Will County Station. Midwest's Powerton Station plant near Peoria is also named in the lawsuit.

The Clinton administration launched a sweeping round of Clean Air Act lawsuits against the electric utility industry in the late 1990s. Sixteen have since been settled, while six remain active. Those include Clinton-era challenges against Cinergy, Duke Energy and Alabama Power, as well as two other cases filed during the Obama administration against Westar Energy and Louisiana Energy.

Environmental groups welcomed the latest enforcement effort.

"Polluters beware," said Frank O'Donnell, director of the advocacy group Clean Air Watch. "The Bush era is over. The environmental cop is back on the beat."

Jeff Holmstead, the head of the EPA air pollution office during the first four years of the George W. Bush administration, said the Obama EPA has been under "enormous pressure" from environmental groups to file the case against Midwest Generation.

More likely, Holmstead said the Justice Department, EPA and the Illinois officials are hoping to force a settlement, given the long slog ahead if the case were to go to court.

"My sense is DOJ has a hard time winning these cases lately," said Holmstead, now an industry attorney at Bracewell & Giuliani. "They are hard cases to prove."

Click here to read the governments' lawsuit against Midwest Generation.

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