Firm to pay $1.2 billion in new pollution controls

WASHINGTON -- In the largest settlement ever with a utility under the nation's clean air laws, Dominion Virginia Power Co. is agreeing to spend $1.2 billion to reduce pollution at eight power plants in Virginia and West Virginia and to pay a $5.3 million federal fine.

One of the nation's largest energy producers, Richmond, Va.-based Dominion will be required to install state-of-the-art emissions controls by 2013 at six coal-fired plants in Virginia and two in West Virginia.

The new pollution scrubbers are expected to reduce emissions of acid rain-causing sulfur dioxide and smog-causing nitrogen oxides by about two-thirds from 2000 levels. Dominion will also be required to cut particulate emissions, or soot, which contribute to asthma and other respiratory ailments.

The company also is agreeing to spend about $14 million for environmental projects such as retrofitting diesel bus engines, mounting solar panels on municipal buildings and conserving forest land.

The projects include $2 million for West Virginia to protect land in the Cheat River Gorge and $1 million for the purchase of hybrid vehicles in Shenandoah National Park.

The settlement concludes an agreement in principle reached between the company and the government in 2000 -- and represents the fourth and largest of such federal settlements with utilities so far under the "new source review" provisions of the Clean Air Act.

The new source review provisions date to 1977 and affect the way older industrial plants have to deal with air pollution when they expand, make major repairs or modify operations to increase efficiency.

The latest settlement was being reached under pressure from the Environmental Protection Agency and the Justice Department, and from state officials in Virginia, West Virginia, Connecticut, New Jersey and New York who complained the plants' air pollution dirtied their regions.

Still, a spokesman for Dominion said the company initiated the settlement talks in hopes of resolving the matter before any official action was taken. In 1999, the Clinton-era EPA began investigating the company's largest coal-fired power plant, Mount Storm Power Station near Davis, W.Va. A few weeks after the company's outreach in May 2000, the EPA alleged Clean Air Act violations involving that plant.

The settlement includes the other plants though no violations were alleged at them.

"This is something we worked three years to get and we're very happy to be this close to having it resolved," company spokesman Dan Genest said. "We obtained some flexibility to make some modifications and upgrades to our plants that will help us to improve their efficiency."

EPA officials said the settlement would be announced Monday. A Justice Department official said Friday that officials there could not discuss the settlement because a final agreement had not yet been signed by all parties.

Once it is completed, the settlement is to be filed Monday in U.S. District Court for the Eastern District of Virginia, whose approval after a public comment period is required for it to become effective.

Virginia Gov. Mark R. Warner said, "These emissions reductions will mean substantial improvements in air quality across Virginia," including clearer park views, a cleaner Chesapeake Bay and healthier forests.

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On the Net:

Dominion Virginia Power: http://www.dom.com

Environmental Protection Agency: http://www.epa.gov