Interstate Power and Light Company Clean Air Act Settlement

(Washington, DC – July 15, 2015) The U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department (DOJ) today announced a global Clean Air Act settlement with Interstate Power and Light Company, (IPL) that will cover seven coal-fired power plants located in Allamakee, Clinton, Des Moines, Dubuque, Linn, Marshall, and Wapello counties in Iowa. IPL approached the EPA in late 2011 to explore a voluntary system-wide Prevention of Significant Deterioration (PSD) settlement at its Iowa units. IPL operates the plants in Iowa that are covered by the settlement. The State of Iowa, the County of Linn, Iowa, and the Sierra Club are co-plaintiffs to the settlement. IPL has agreed to invest more than $620 million in pollution control technology that will protect public health and resolve violations of the Clean Air Act. The settlement will require that IPL spend $6 million on environmental mitigation projects and pay a civil penalty of $1.1 million.  

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Overview of Company

The IPL plants serve approximately 530,000 electric customers in residential, agricultural, industrial, and commercial markets in Iowa. IPL operates the seven coal-fired power plants, all located in Iowa, with a total capacity of 1,900 megawatts (MW). The Burlington Plant consists of one coal-fired electric utility steam generating unit identified as Unit 1, with a rated capacity of 212 MW.  The Dubuque Plant consists of three coal-fired electric utility steam generating unit identified as Units 1, 5, and 6, with a rated capacity of 38 MW, 29 MW, and 15 MW, respectively. The Lansing Plant consists of one coal-fired electric utility steam generating unit identified as Unit 4, with a rated capacity of 275 MW. The ML Kapp Plant consists of one coal-fired electric utility steam generating unit identified as Unit 2, with a rated capacity of 219 MW.  The Ottumwa Plant consists of one coal-fired electric utility steam generating units identified as Unit 1, with a rated capacity of 726 MW. The Prairie Creek Plant consists of four coal-fired electric utility steam generating units identified as Units 1, 2, 3 and 4, with a rated capacity of  heat input of 245 million British Thermal Units per hour (mmBTU/hr), a heat input of 304 mmBTU/hr, 50 MW, and 149 MW, respectively. The Sutherland Plant consists of two coal-fired electric utility steam generating units identified as Units 1 and 3, with a rated capacity of 38 MW and 82 MW, respectively.

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The EPA determined that IPL commenced construction of one or more major modifications, as defined in the CAA and implementing regulations, at the Lansing and Ottumwa plants, in violation of PSD. Such modifications resulted in significant net emissions increases, as defined by the relevant PSD regulations, of oxides of nitrogen (NOx) and/or sulfur dioxide (SO2). IPL approached the EPA in late 2011 to explore a system-wide PSD settlement at its Iowa units. The parties initiated settlement discussions in November 2011.

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Injunctive Relief

The consent decree secures injunctive relief from all of IPL’s coal-fired power units.  Compliance with the settlement will reduce SO2, NOx, and particulate matter (PM) emissions by approximately 36,300 tons per year from 2011 levels.  The EPA estimates that the cost of the injunctive relief will be more than $620 million. 

The settlement includes:

  • Retirement of Lansing Unit 1, Lansing Unit 2, Lansing Unit 3, M.L. Kapp Unit 1, Sutherland Unit 2, Sixth Street Unit 1, Sixth Street Unit 2, Sixth Street Unit 3, Sixth Street Unit 4, and Sixth Street Unit 5 upon entry of the consent decree.
  • Retirement or repowering of Dubuque Unit 1, Dubuque Unit 5, Dubuque Unit 6, Sutherland Unit 1, and Sutherland Unit 3 by June 1, 2019.
  • Retirement or refueling of M.L. Kapp Unit 2 by June 1, 2015, of Burlington Unit 1 and Prairie Creek Unit 4 by December 31, 2020, and of Prairie Creek boiler 1, Prairie Creek boiler 2, and Prairie Creek Unit 3 by December 31, 2025.
  • Continuous operation of selective catalytic reduction at Lansing Unit 4, and compliance with a 30-day rolling average emission rate for NOx of no greater than 0.090 lb/mmBTU (by January 31, 2015) and a 30-day rolling average emission rate for NOx of no greater than 0.080 lb/mmBTU (by December 31, 2015).
  • Continuous operation of a low NOx combustion system at Ottumwa Unit 1 and compliance with (a) a 30-day rolling average emission rate for NOx of no greater than 0.210 lb/mmBTU, and (b) a 12-month rolling average emission rate for NOx of no greater than 0.160 lb/mmBTU, by no later than 60 days upon entry of the consent decree.
  • Installation and continuous operation of selective catalytic reduction (or alternate equivalent NOx control technology approved pursuant to the consent decree) at Ottumwa Unit 1 by December 31, 2019, and compliance with a 30-day rolling average emission rate for NOx of no greater than 0.080 lb/mmBTU.
  • Installation and continuous operation of dry flue gas desulfurization at Ottumwa Unit 1 (by December 31, 2015) and at Lansing Unit 4 (by December 31, 2016), and compliance with a 30-day rolling average SO2 emission rate of no greater than 0.075 lb/mmBTU.
  • Compliance with annual system--and for Prairie Creek plant--tonnage limitations for NOx and SO2.
  • Annual surrender of any excess SO2 and NOx allowances resulting from actions taken under the consent decree. 

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Pollutant Reductions

As compared to IPL’s 2011 emissions, EPA expects the following emission reductions to result from this settlement:

  • SO2 about 32,500 tons per year
  • NOx about 3,800 tons per year

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Health Effects and Environmental Benefits

The pollutants reduced under this settlement have numerous adverse environmental and health effects. Sulfur dioxides and nitrogen oxides can be converted to fine particulate matter once in the air.  Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. Other health and environmental impacts from the pollutants addressed in this settlement include the following: 

Sulfur dioxide – High concentrations of SO2 affect breathing and may aggravate existing respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children, and the elderly. Sulfur dioxide is also a primary contributor to acid deposition, or acid rain.

Particulate matter – Short term exposure to particulate matter can aggravate lung disease, cause asthma attacks and acute bronchitis, may increase susceptibility to respiratory infections and has been linked to heart attacks.

Nitrogen oxides – Nitrogen oxides can cause ground-level ozone, acid rain, particulate matter, global warming, water quality deterioration, and visual impairment. Nitrogen oxides play a major role, with volatile organic chemicals, in the atmospheric reactions that produce ozone. Children, people with lung diseases such as asthma, and people who work or exercise outside are susceptible to adverse effects such as damage to lung tissue and reduction in lung function

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Environmental Mitigation Projects

The proposed consent decree requires the IPL defendants to spend not less than $6 million on environmental mitigation projects.

Major solar photovoltaic development project

The major solar photovoltaic development power purchase agreement project allows IPL to elect to submit a plan to spend up to $3,000,000 to execute a long term PPA with one or more third-party project developers who will then develop new solar PV installations to be located in Iowa. The agreement will include a term of at least 10 years for which IPL commits to purchase the power generated and, if generated, acquire associated renewable energy credits (RECs) from the solar PV installations. IPL is not allowed to use, and must retire, all RECs generated during the first 10 years of performance and must identify these RECs as retired in a tracking system designated as acceptable by the program recognizing the RECs. The proposed consent decree prohibits IPL from using the RECs generated during the initial 10 years of the agreement(s) for compliance with any renewable portfolio standard or for any other compliance purpose during or after the initial 10 years. The project is expected to promote the development of solar energy.

Anaerobic digestion installation project

The anaerobic digestion installation project allows IPL to elect to submit a plan to spend up to $3,000,000 to develop a new or expand an existing anaerobic digester with nutrient recovery or nutrient removal at one or more farms or other agricultural facilities, properties, or operations in Iowa (i.e., project beneficiaries). IPL will fund one or more service contracts for the benefit of the project beneficiary that provides for operation and maintenance of the projects for 20 years from the date of operation. The project service contracts will provide for annual system checkups and for normal component maintenance and replacements, including installation of new system components as needed to ensure the ongoing maintenance and performance of the system for no less than 20 years.

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Coal-fired boiler replacement in schools

The coal-fired boiler replacement project allows IPL to elect to submit a plan to fund up to $1,500,000 to use in the replacement (including design, equipment purchase, installation, and project start up) of one or more coal-fired boilers utilized by public schools located in Iowa through installation of a natural gas boiler or geothermal technologies. In awarding funding, IPL shall consider the following factors: (1) capability of the school to participate in, complete, and operate a replacement project; (2) proximity of the school to the Defendant’s facilities in the state of Iowa; (3) emissions reductions that will result from the Project; and (4) experience and demonstrated interest of applicant.

Compressed natural gas or alternative fuel fleet replacement project

The compressed natural gas (CNG) or alternative fuel fleet replacement project allows IPL to submit a plan to spend up to $500,000 to replace gasoline and diesel powered fleet vehicles located in IPL’s service territory (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured alternative fuels vehicles and/or CNG vehicles. Alternative fuel vehicles include hybrid vehicles, plug-in hybrid vehicles, plug-in battery vehicles, or electric vehicles. Upgraded fleet vehicles may be owned by IPL or may be publicly-owned motor vehicles. IPL shall only receive credit toward project dollars for the incremental cost of qualifying vehicles as compared to the cost of a newly manufactured, similar motor vehicle powered by conventional diesel or gasoline engines. The replacement of gasoline and diesel vehicles with alternative fuels vehicles or CNG vehicles will reduce emissions of NOx, PM, volatile organic compounds, and other air pollutants.

Residential woodstove/fireplace change-out project

The residential woodstove/fireplace change-out project allows IPL to propose a plan to spend up to $1.5 million to sponsor a wood-burning appliance change out and retrofit project in Linn County and IPL’s extended service territories in Iowa. The air pollutant reductions shall be obtained by replacing, retrofitting, or upgrading inefficient, higher polluting wood burning appliances, including fireplaces, with cleaner burning appliances and technologies, such as: (1) retrofitting older hydronic heaters (aka outdoor wood boilers) to meet EPA Phase II hydronic heater standards; (2) replacing older hydronic heaters with EPA Phase II hydronic heaters, or replacing EPA-certified woodstoves with other cleaner burning, more energy efficient hearth appliances (e.g., wood pellet, gas or propane appliances), or EPA Energy Star qualified heating appliances; (3) replacing non EPA-certified woodstoves with EPA-certified woodstoves or cleaner burning, more energy-efficient hearth appliances; (4) replacing spent catalysts in EPA-certified woodstoves; and (5) replacing/retrofitting wood burning fireplaces with EPA Phase II qualified retrofit devices or cleaner burning natural gas fireplaces. To qualify for replacement, retrofitting, or upgrading, the wood burning appliance/fireplace must be in regular use in a primary residence during the home-heating season, and preference shall be given to replacement, retrofitting, or upgrading wood burning appliances/fireplaces that are a primary or significant source of residential heat. The intent of the projects would be to reduce fine particle pollution and hazardous air pollutants in areas.

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Civil Penalty

IPL will pay a total of $1.1 million in civil penalties.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Northern District of Iowa, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

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The Power Plant Enforcement Effort

This is the 30th judicial settlement secured by DOJ and EPA, as part of a National Enforcement Initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed nearly 2 million tons each year once all the required pollution controls have been installed and implemented.

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For more information, contact:

Kellie Ortega
Air Enforcement Division
U. S. Environmental Protection Agency
1200 Pennsylvania Ave, NW, MC 2242A
Washington, DC 20460
(202) 564-5529

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