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Enforcement

Wisconsin Power and Light, et al. Settlement

(Washington, DC - April 22, 2013) The U.S. Environmental Protection Agency (EPA), the Department of Justice, and the United States Attorney’s Office for the Western District of Wisconsin announced a Clean Air Act (CAA) settlement with Wisconsin Power and Light Company (WPL) that will significantly reduce air pollution from three coal-fired power plants located near Portage, Sheboygan, and Cassville, Wis.

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Overview of Company

The WPL plants serve approximately 459,000 electric customers in residential, agricultural, industrial, and commercial markets in central and southern Wisconsin. WPL operates the Columbia, Edgewater and Nelson Dewey coal-fired power plants, all located in Wisconsin, with a total capacity of 1,993 MW. The Columbia Plant consists of two coal-fired electric utility steam generating units identified as Units 1 and 2, with a rated capacity of 512 MW and 511 MW, respectively. The Edgewater Plant consists of three coal-fired units, Units 3-5, with a rated capacity of 60 MW, 330 MW, and 380 MW, respectively. The Nelson Dewey Plant consists of two coal-fired electric utility steam generating units identified as Units 1 and 2, with a rated capacity of 100 MW each.

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Violations

As part of the Power Plant Initiative, the EPA began an investigation of the WPL system in 2008. Based upon WPL’s response to the EPA’s CAA Section 114 Information Requests and other information obtained during its investigation, EPA concluded that there were PSD violations at some of WPL’s plants. On December 14, 2009, EPA issued a Notice of Violation to WPL generally alleging that WPL performed projects that triggered PSD applicability at the Columbia, Edgewater, and Nelson Dewey plants. The EPA also alleged violations of Title V of the CAA for failure to submit an application to include all applicable requirements in WPL’s Title V permits. The parties initiated settlement discussions in March 2010.

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Injunctive Relief

The consent decree secures injunctive relief from all of WPL’s coal-fired power units. Compliance with the settlement will reduce sulfur dioxide (SO2), oxides of nitrogen (NOx), and particulate matter (PM) emissions by approximately 54,000 tons per year from 2011 levels. The EPA estimates that the cost of the injunctive relief will be more than $1 billion.

The settlement includes:

  • Retirement, refueling, or repowering the Nelson Dewey Units and Edgewater Unit 3 by December 31, 2015, and Edgewater Unit 4 by December 31, 2018
  • Installation and continuous operation of selective catalytic reduction at Columbia Unit 2 (by December 31, 2018) and Edgewater Unit 5 (by May 1, 2013), and compliance with a 30-Day Rolling Average NOx Emission Rate of no greater than 0.080 lb/mmBTU and a 12-Month Rolling Average NOx Emission Rate of no greater than 0.070 lb/mmBTU at each unit
  • Installation and continuous operation of dry flue gas desulfurization at Columbia Units 1 and 2 (by December 31, 2014) and at Edgewater Unit 5 (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 plant tonnage limitations for NOx and SO2
  • Optimization of existing PM controls to meet unit-specific emissions limitations and demonstrating continuous compliance using PM CEMS on Columbia Units 1 and 2 and Edgewater Unit 5
  • 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 WPL’s 2011 emissions, EPA expects the following emission reductions to result from this settlement:

  • SO2 about 46,600 tons per year
  • NOx about 6,000 tons per year
  • PM about 1,300 tons per year

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Health and Environmental Effects

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 WPL Defendants to spend not less than $8.5 million on environmental mitigation projects. The WPL Defendants will provide the National Forest Service and the National Park Service each with $260,500 for land restoration projects. Additionally, under the proposed decree, the WPL Defendants must choose to perform a selection of the following projects:

  • land acquisition and restoration (by an entity other than the FS or NPS);
  • execute a long term major solar photovoltaic (PV) power purchase agreement (PPA) with third-party project developer(s) who will then develop new PV installations;
  • installation of conventional flat panel or thin film solar panels on government or non-profit buildings;
  • wind boost or hydro boost projects (renewable energy resource enhancements) for existing wind farms and hydroelectric facilities;
  • a penstock upgrade project to increase the gross generating capacity of the existing Grandfather Falls hydroelectric facility;
  • development of a community manure digester;
  • compressed natural gas or hybrid fleet replacements;
  • mitigation of the adverse impacts of nitrogen loading in the Yahara River;
  • collection and conversion of separated organics to methane gas for electric generation or vehicle fuel;
  • residential wood appliance change-out program;
  • energy efficiency enhancements.

WPL Defendants will submit a plan to the EPA, for review and approval, identifying which of these projects they intend to perform, the proposed amount(s) to be spent on the projects, and the schedule for implementing the projects.

The United States Forest Service and the National Park Service will each use $250,000 on projects to address the damage done from WPL’s alleged excess emissions. The Forest Service Project(s) will focus on one or more areas alleged to have been injured by emissions from WPL System plants, including but not limited to the Chequamegon-Nicolet National Forest and the Manistee National Forest. The National Park Service Project(s) will focus on one or more areas alleged to have been injured by emissions from WPL System plants, including but not limited to Pictured Rocks National Lakeshore, Sleeping Bear Dunes National Lakeshore, Keweenaw National Historic Park, Apostle Islands National Lakeshore, Mississippi River and Recreation Area, Saint Croix National Scenic Riverway, and Effigy Mounds National Monument. The project(s) will restore areas adversely impacted by the WPL system’s SO2 emissions that resulted, in part, from the deposition of acid rain.

United States Forest Service and the National Park Service Funding for Land Restoration Projects

The United States Forest Service and the National Park Service will each use $260,500 on projects to address the damage done from WPL’s alleged excess emissions. The Forest Service Project(s) will focus on one or more areas alleged to have been adversely effected by emissions from WPL System plants, including, but not limited to, the Chequamegon-Nicolet National Forest and the Manistee National Forest. The National Park Service Project(s) will focus on one or more areas alleged to have been adversely effected by emissions from WPL System plants, including, but not limited to, Indiana Dunes National Lakeshore, Sleeping Bear Dunes National Lakeshore, Mississippi National River and Recreation Area, Saint Croix National Scenic Waterway, Herbert Hoover National Historic Park, and Effigy Mounds National Monument. The project(s) will restore areas adversely impacted by the WPL system’s SO2 emissions that resulted, in part, from the deposition of acid rain.

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Land Acquisition and Restoration Project (other than by FS or NPS)

The Land Acquisition and Restoration Project allows WPL to elect to submit a plan to spend up to $1,000,000, and WPS to submit a plan to spend up to $1,100,000, to acquire/donate and restore lands alleged to have been adversely effected by emissions from WPL System plants. Any transfer of property or land interests by WPL to any governmental or nongovernmental organization would be credited at fair market value and must provide for perpetual protection of the land. Restoration may include direct reforestation, particularly of tree species that may be affected by acidic deposition. The EPA has had a number of land acquisition and restoration projects in previous Clean Air Act settlements with utilities.

Major Solar Photovoltaic Development PPA Project

The Major Solar Photovoltaic Development PPA Project allows WPL to elect to submit a plan to spend up to $5,000,000 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 Wisconsin or another state in WPL’s service territory. The PPA will include a term of at least 10 years for which WPL commits to purchase the power generated and, if generated, acquire associated renewable energy credits (RECs) from the solar PV installations. WPL 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 REC. The proposed consent decree prohibits WPL from using the RECs generated during the initial 10 years of the PPA(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.

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Solar PV Panels Project

The Solar PV Panels Project allows WPL to elect to submit a plan to spend up to $5,000,000, and MGE to elect to submit a plan to spend up to $500,000, to fund the installation of conventional flat panel or thin film solar photovoltaics to create a grid connected on public school buildings and buildings owned by not-for-profit organizations located in WPL’s service territory in Wisconsin. As part of this project, WPL and MGE must each fund a project service contract for maintenance costs for 25 years. If implemented, the project will benefit the local community by reducing the demand for power in an area dominated by coal.

Wind Boost and Hydro Boost Projects

The Wind Boost and Hydro Boost Projects allow WPL to propose a plan to spend up to $2,000,000 to fund projects designed to increase the power production potential of existing wind farms and/or hydroelectric facilities in Wisconsin. Such projects shall be in addition to any other legal obligations, including WPL’s obligations under any state Renewable Portfolio Standard. The intent of the projects would be to increase renewable resource wind and hydro generation facilities, which is expected to offset coal generation.

With regard to the wind farm project, prior to implementation of the project, WPL shall complete a study of equipment, historic production, and wind conditions to customize optimizations and maximize production from individual turbines and from the wind site as a whole. The potential improvements might include a control system upgrade, blade tip extensions, winter icing prevention, turbine pitch optimization, and/or turbine control software.

With regard to the hydroelectric facility project, WPL shall propose a plan designed to increase the existing hydroelectric facility water utilization and energy output. The intent of the project would be to gain electrical energy production from the renewable resource without changing the river flow characteristics. Project activities include improving the water wheel design for increased energy output while maintaining the current river water flow and making control system enhancements to maintain water levels at lower flow rates while continuing electrical generation. Grandfather Falls Penstock Upgrade Project

The Grandfather Falls Penstock Upgrade Project allows WPSC to submit a plan to spend up to $1,100,000 to replace two 1310-foot-long, 13.5-foot and 11-foot-diameter wood stave penstocks with spiral wound steel penstocks at the existing Grandfather Falls hydroelectric facility. The project is expected to increase the gross generating capacity of the facility by over 400,000 kW hours per year, without changing current river flow characteristics, and to offset coal generation. The $1,100,000 shall act as seed funding for the entire Grandfather Falls Penstock Upgrade Project, which is expected to cost on the order of ten to twelve times that amount. The Grandfather Falls Penstock Upgrade Project shall be in addition to any other legal obligations, including WPS’ obligations under any state Renewable Portfolio Standard. WPS shall not seek to certify any additional capacity resulting from penstock replacement, thereby ensuring additional RECs are not available for sale or use towards any state RPS obligation.

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Community Digester Project

The Community Digester Project allows WPL to propose a plan to spend up to $750,000 to fund a project to reduce pollutants through conversion of food and/or animal waste to biogas or electricity within WPL’s service territory. Such a project will promote solutions to the continuing water quality issues posed by phosphorus and nutrient-containing runoff and generate a biogas that would be used to generate renewable electricity for offsite or facility use.

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Compressed Natural Gas or Hybrid Fleet Replacement Project

The Compressed Natural Gas (CNG) or Hybrid Fleet Replacement Project allows WPL to submit a plan to spend up to $125,000,000, WPS to submit a plan to spend up to $1,100,000, and MGE to submit a plan to spend up to $250,000, to replace gasoline and diesel powered fleet vehicles located in WPL’s service territory (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured alternative fuels vehicles and/or CNG vehicles. Upgraded fleet vehicles may be owned by the WPL Defendant or may be publicly-owned motor vehicles. Each WPL Defendant 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, VOCs, and other air pollutants.

Nitrogen Impact Mitigation in the Yahara River Project

The Nitrogen Impact Mitigation in the Yahara River Project allows MGE to elect to submit a plan to spend up to $100,000 to mitigate the adverse impacts of nitrogen loading in the Yahara River, which will have the co-benefit of reducing phosphorus loading and preventing harmful algal blooms. The project could include, for example, creation of forested stream buffers on agricultural land or other land cover to establish a “buffer zone” to filter runoff before it enters the waterway, or installation of fencing to keep livestock out of waters.

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Source Separated Organic Waste Project

The Source Separated Organic Waste Project allows MGE to elect to submit a plan to spend up to $100,000 to support a source separated organics project within MGE’s service territory in Wisconsin. The money will be used to develop a program to separately collect organic refuse material (e.g. food waste, soiled paper products, diapers, and pet waste) and convert the separated organics to methane gas for electric generation or vehicle fuel.

Residential Woodstove/Fireplace Change-Out Project

The Residential Woodstove/Fireplace Change-Out Project requires MGE to propose a plan to spend between $75,000 and $250,000 to sponsor a wood-burning appliance change out and retrofit project in Dane county and adjacent counties in Wisconsin. 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:

  • retrofitting older hydronic heaters (aka outdoor wood boilers) to meet EPA Phase II hydronic heater standards;
  • 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;
  • replacing non EPA-certified woodstoves with EPA-certified woodstoves or cleaner burning, more energy-efficient hearth appliances;
  • replacing spent catalysts in EPA-certified woodstoves; and
  • replacing/retrofitting wood burning fireplaces with EPA Phase 2 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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Energy Efficiency Projects

WPL, WPS and MGE may each elect to submit a plan to spend up to $200,000 each to reduce criteria pollutants through the purchase and installation of environmentally beneficial energy efficiency technologies designed to minimize the use of electricity and natural gas at state, local, or tribal government-owned buildings, schools and/or buildings owned by nonprofit organizations within WPL’s service territory.

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Civil Penalty

WPL will pay a total of $2.45 million in civil penalties.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Western District of Wisconsin, 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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For more information, contact:

Kellie Ortega
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
(202) 564-5529
Kellie Ortega (ortega.kellie@epa.gov)

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