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Wisconsin Electric Power Company (WEPCO) Clean Air Act Civil Settlement

The U.S. Environmental Protection Agency and the Department of Justice on April 29, 2003 announced the major Clean Air Act (CAA) settlement with Wisconsin Electric Power Company (WEPCO), also known as We Energies, to resolve CAA violations of the New Source Review requirements at several of the company's coal-fired power plants. Wisconsin Electric is a subsidiary of Wisconsin Energy Corporation, which operates five coal-fired power plants in Wisconsin and Michigan.

Under the settlement, WEPCO will spend $600 million between now and 2013 to install state-of-the-art pollution controls to meet stringent pollution limits or to remove the units from service. This will reduce approximately 105,000 tons of sulfur dioxide and nitrogen oxides emissions annually from the plants in Wisconsin and Michigan. It will also retire the pollution emission allowances that it or others could use to emit additional pollution at the facilities. WEPCO also will spend at least $20 million to fund an environmentally beneficial project in Michigan that is designed to reduced mercury a coal-fired power plants as well as to pay a civil penalty of $3.2 million.

Wisconsin Electric Power Company was a party in the litigation and landmark 1990 7th Circuit Court decision (Wisconsin Electric Power Co. v. Reilly, 893 F.2d 901 (7th Cir. 1990)), regarding the application of the Clean Air Act's NSR requirements to coal-fired utilities. The WEPCO coal-fired units that were at issue in the Wisconsin Electric decision will be shut down or controlled in 2004 under the settlement.

An Amended Consent Decree for this settlement was filed on July 10, 2003. The Amended Consent Decree modifies the original decree in four ways: (1) identifies the State of Michigan as an additional plaintiff; (2) modifies the penalty section to direct a $100,000 civil penalty to the State of Michigan thereby decreasing the civil penalty paid to the United States Treasury from $3.2M to $3.1M; (3) resolves claims brought by the State of Michigan, which are identical to the claims alleged and resolved by the United States; and (4) clarifies non-substantive provisions that identify when the compliance requirements actually commence.

The core elements of the decree remain the same: Wisconsin Electric will pay a penalty of $3.2 million; install pollution control equipment with an estimated capital cost of approximately $600 million; and spend at least $20 million to undertake an environmentally beneficial project designed to implement and explore innovative ways to reduce mercury at coal-fired plants. EPA expects that the settlement will reduce annual SO2 emissions by approximately 72,000 tons while annual NOX emissions will be reduced by 32,000 tons.

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For additional information, contact:

Edward Messina
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-1191
messina.edward@epa.gov

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