Former State Line owner to pay $13.2M in settlement

2013-04-01T14:30:00Z 2013-04-02T12:25:07Z Former State Line owner to pay $13.2M in settlementMatt Saltanovitz matthew.saltanovitz@nwi.com, (219) 933-4089 nwitimes.com

Dominion Energy has agreed to pay a $3.4 million civil penalty and spend about $9.8 million on environmental mitigation projects to resolve Clean Air Act violations in three locations, including its former State Line Energy plant in Hammond.

The settlement announced Monday by the Department of Justice and the U.S. Environmental Protection Agency will result in reductions of nitrogen oxides, sulfur dioxide, and particulate matter by more than 70,000 tons per year in Hammond; Kincaid, Ill.; and Somerset, Mass., according to a news release

“This settlement limits power plant emissions in Northwest Indiana and central Illinois – and requires Dominion to fund environmental mitigation work, including projects that will improve air quality near Chicago rail yards and protect lands around the Indiana Dunes National Lakeshore,” EPA Region 5 Administrator Susan Hedman said.

Under the settlement, Dominion must permanently retire its former State Line plant in Hammond and install or upgrade pollution-control technology on the other two plants. The former coal plant at the northwestern tip of the city near Lake Michigan stopped generating electricity in March 2012 after then-owner Dominion decided to shutter the plant in lieu of paying for costly environmental upgrades.

As part of the National Coal-Fired Power Plant Enforcement Initiative, the EPA began an investigation of the Dominion system in 2008. The EPA concluded there were Prevention of Significant Deterioration violations at some of Dominion’s plants.

Dominion denies the allegations, according to a company spokesman.

"The company has been in compliance with the Clean Air Act at each of these power stations listed in the consent decree," said Jim Norvelle, Director of media relations/generation for Dominion. "We entered into the consent agreement to avoid a long and costly legal challenge and to improve the environment. Dominion believes this settlement is good for the environment, its customers and its shareholders.”

The settlement also requires Dominion to spend $9.75 million on projects that will benefit the environment and human health in communities located near the Dominion facilities. A total of $9 million will be spent on such projects as switcher locomotive idle reduction for Chicago rail yards, and land acquisition and restoration adjacent to or near the Indiana Dunes National Lakeshore.

The company also will spend money on energy efficiency and geothermal/solar projects for local schools and food banks, as well as clean diesel engine retrofits for municipalities and school districts.

Dominion also must pay a total of $750,000 to the United States Forest Service and the National Park Service to be used on projects to address the damage done from Dominion’s alleged excess emissions.

It was announced in June that BTU Solutions, a Texas-based company specializing in demolishing power plants, bought State Line Energy. BTU Solutions was scheduled to demolish the facility by June 2014.

The settlement contains provisions that allow for the transfer of the requirements to the new owner, according to Dominion. The Kincaid and Somerset facilities are in the process of being sold, the company said.

Hammond officials previously said the State Line Energy site — likely the single-largest source of asbestos in the city — will require extensive remediation.

The settlement, entered in the U.S. District Court for the Central District of Illinois, is subject to a 30-day public comment period and final court approval.

For more information about the settlement, visit www.epa.gov/enforcement/air/cases/dominionenergy.html

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