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UNITED STATES AND NEW JERSEY ANNOUNCE CLEAN AIR ACT COAL-FIRED POWER PLANT SETTLEMENT WITH PSEG FOSSIL LLC

Release Date: 01/24/2002
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

FOR IMMEDIATE RELEASE DOJ (202) 514-2007
January 24, 2001 EPA (212) 637-3669

WWW.USDOJ.GOV
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Washington, DC– The Justice Department, the Environmental Protection Agency and the State of New Jersey today announced a major Clean Air Act settlement involving PSEG Fossil LLC under which the company will spend over $337 million to install state-of-the-art pollution controls to eliminate the vast majority of sulfur dioxide and nitrogen oxide emissions from its Mercer and Hudson coal-fired power plants in Jersey City and Hamilton, N.J.

“This important settlement reflects our continuing commitment to enforce vigorously the Clean Air Act to protect public health and the environment,” said Attorney General John Ashcroft.

“This agreement is an excellent example of how effective federal and state partnerships in enforcement actions can greatly benefit the environment and assure public health protection,” said EPA Administrator Christie Todd Whitman. “Today’s agreement will improve the air quality for those who live around the Mercer and Hudson plants.”

The combined effect of the pollution controls will reduce the company’s emissions of sulfur dioxide (SO2) by 90 percent and its emissions of nitrogen oxides (NOx) by more than 80 percent. Overall reductions will be at least 36,000 tons of SO2 and 18,000 tons of NOx per year. These decreases represent 32 percent of all the SO2 and 20 percent of all the NOx emitted from stationary sources in New Jersey, and 19 percent of all the SO2 and 5 percent of all the NOx from all sources in the state, including cars and trucks. The settlement lodged today with the United States District Court in Newark resolves federal and state allegations that the Hudson and Mercer plants are unlawfully operating because they were modified without installing necessary pollution controls and obtaining proper permits required by the “New Source Review” program of the Clean Air Act.

At the Hudson and Mercer stations PSEG Fossil will install flue gas desulfurization devices (also called “scrubbers”), which use the control technology capable of removing SO2 from power plant emissions, and selective catalytic reduction systems (“SCR”) to control NOx. The company will also undertake a program at both stations to upgrade the effectiveness of its existing control devices for particulate matter (PM) and will install one additional particulate control device which will eliminate over 1,000 tons per year of that pollutant. In addition, the company will retire pollution emission allowances and credits that PSEG Fossil or others could use to emit additional pollution into the environment.

“PSEG negotiated in good faith and demonstrated a willingness to put litigation considerations aside and to act quickly to improve the health of New Jersey’s citizens and the quality of air they breathe. We hope other utilities follow PSEG’s lead,” said Tom Sansonetti, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. Sulfur dioxide and NOx are significant contributors to acid rain; NOx also increases low level ozone which causes smog; fine particulate matter causes haze. All of these pollutants cause severe respiratory problems and exacerbate cases of childhood asthma.

Given the significant expense and engineering complexity of the work agreed to by PSEG Fossil, installation of the controls will be in phases beginning with optimization of PM controls in 2002, installation of SCRs beginning in 2004, and installation of scrubbers beginning in 2006. All work will be complete by 2012.

In addition to the pollution reductions secured by the settlement, PSEG Fossil has agreed to pay a civil penalty of $1.4 million and to spend at least $6 million on three additional projects that will partially offset the impact of past emissions: it will take steps to reduce its emissions of carbon dioxide by 15 percent; contribute to New Jersey’s ongoing efforts to recover and use methane gas from landfills; and develop technology to reduce and monitor emissions of mercury from its plants.

This settlement is the latest in a series of cases that the Administration has undertaken to bring the power plant industry into full compliance with the Clean Air Act. Today’s announcement represents the second judicial settlement under the power plants enforcement effort; the first settlement being with Tampa Electric Company in January 2001. EPA has also entered into agreements in principle with Cinergy and Virginia Electric Power Company. In a related announcement last week the Justice Department concluded that EPA’s New Source Review enforcement actions are consistent with the Clean Air Act and its regulations.

Today’s settlement is subject to a 30-day public comment period and final court approval.

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