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U.S. Announces Major Clean Air Act Settlement with Wisconsin Electric Power Co. - Company Agrees to Reduce More Than 105,000 Tons of Pollutants Annually

Release Date: 04/29/2003
Contact Information:

ENRD (202) 514-2007
EPA (202) 564-7842

WASHINGTON, D.C. (04/29/03) - The Department of Justice and the Environmental Protection Agency today announced a $600 million Clean Air Act settlement with Wisconsin Electric Power Company (WEPCO), also known as We Energies. The settlement resolves the federal government’s claims that Wisconsin Electric violated the New Source Review (NSR) provisions of the Clean Air Act at several of its plants by undertaking major modifications and increasing emissions of air pollution without also installing required air pollution controls. The settlement is expected to eliminate more than105,000 tons of harmful air pollutants annually from five coal-fired electricity generating plants in Wisconsin and Michigan.

Today’s settlement, initiated by the Bush Administration, is consistent with a series of cases pursued by the federal government to bring the coal-fired power plant industry into full compliance with the New Source Review requirements of the Clean Air Act. The agreement requires Wisconsin Electric to install state-of-the-art controls or elect to shut down units, representing 80 percent of its total coal-fired megawatt generating capacity. One-hundred percent of the units covered under the agreement must also comply with a declining system-wide rate and cap for sulfur dioxide (SO2) and nitrogen oxide (NOx).

“EPA continues to aggressively enforce the nation’s environmental laws, and it shows. Our air is cleaner as we continue to reach enforcement milestones,” said Christie Todd Whitman, EPA Administrator. “We expect companies to act responsibly and within the law when it comes to protecting public health and the environment.”

“Today’s settlement is another example of the Justice Department’s strong commitment to cleaning up our nation’s air,” said Assistant Attorney General Thomas L. Sansonetti. “Soon the residents of Wisconsin and Michigan will benefit from the drastic reductions in pollutants emitted from these facilities.”

It is estimated that the company will spend up to $600 million to reduce 72,300 tons per year of SO2 and 32,600 tons per year of NOx and improve its control of particulate matter (PM) from each of the plants included in the settlement. The company also will pay a $3.2 million civil penalty and spend at least $20 million to finance an environmental mitigation project demonstrating a new technology to significantly reduce mercury emissions from coal-fired power plants.

Wisconsin Electric is a large Midwestern coal-fired electric utility. The settlement covers five Wisconsin Electric plants, four in Wisconsin and one in Michigan, consisting of 23 electricity generating units. These five plants emitted over 147,000 tons of SO2 and NOx in 2001. 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 these pollutants cause severe respiratory problems and exacerbate cases of childhood asthma.

The settlement will achieve reductions through the installation of new pollution control equipment, the upgrading of existing pollution controls on several of the units in the Wisconsin Electric system, and through the retirement of some older units. This technology is required to be installed or upgraded on specified units in the Wisconsin Electric system.

Wisconsin Electric Power Company was a party in the litigation and landmark 1990 7th Circuit Court decision regarding the application of the Clean Air Act’s NSR standards to coal-fired utilities. The WEPCO coal-fired units that were at issue in the 1990 WEPCO decision will be shut down or controlled in 2004 under the settlement.

The WEPCO settlement is one of several major Clean Air Act settlements announced in April 2003. On April 21, the Department of Justice and EPA announced its largest CAA settlement with a utility in a case involving Virginia Electric and Power Company (VEPCO). Under the settlement, VEPCO agreed to spend $1.2 billion between now and 2013 to eliminate 237,000 tons of SO2 and NOx emissions annually from eight coal-fired electricity generating plants in Virginia and West Virginia. Also in April, the Justice Department and EPA announced two other CAA settlements with grain industry giant Archer Daniels Midland Company (ADM) and Alcoa, Inc. The settlement with ADM will cover operations at 52 plants in 16 states, cost the company an estimated $340 million and eliminate at least 63,000 tons of air pollution a year. Under the settlement with Alcoa, the company will spend an estimated $330 million to install a new coal-fired power plant with state-of-the-art pollution controls at Alcoa’s aluminum production facility in Rockdale, Texas.

The WEPCO settlement was lodged today for a 30-day public comment period in the United States District Court in Milwaukee, Wis.

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“The true measure of success at the EPA is whether our efforts are making America’s air cleaner, its water purer, and its land better protected. These settlements will... make broad- sweeping environmental improvements...both now and for future generations.”

– Administrator Christie Whitman, April 9, 2003

EPA’s policy of “smart enforcement” is working. In the past few weeks, EPA, working the Department of Justice (DOJ) has announced landmark cases that are achieving real results:

WEPCO (April 29, 2003):
      • Under the agreement, WEPCO will spend $600 million to eliminate more than 100,000 tons of sulfur dioxide and nitrogen oxides emissions each year from five coal-fired electricity generating plants in Wisconsin and Michigan.
      • The company will pay a $3.2 million civil penalty.
      • WEPCO will spend at least $20 million to finance an environmental mitigation project demonstrating a new technology to significantly reduce mercury emissions from coal-fired power plants.
      • The settlement covers five WEPCO plants, four in Wisconsin and one in Michigan, comprised of 23 electricity-generating units. These five plants emitted over 147,000 tons of SO2 and NOx in 2001. The settlement will reduce those emissions by 70 percent to 43,600 tons in 2013.

VEPCO (April 21, 2003):
      • The $1.2 billion settlement is the largest Clean Air Act settlement with a utility in the history of EPA.
      • Largest in a series of enforcement settlements with utilities to bring them into full compliance with the NSR provisions of the CAA
      • Reduces approximately 237,000 tons per year of air pollution
      • Requires state-of-the-art pollution controls
      • Direct environmental and visibility improvements in Virginia and West Virginia National Parks
      • $13.9 million for environmental projects in each of 5 States (NY, NJ, CT, VA, W.VA) to offset the impact of past emissions
      • Well-coordinated partnership with the 5 States and the National Park Service

Archer Daniels Midland (April 9, 2003):
      • Landmark Clean Air Act settlement with grain industry giant Archer Daniels Midland Company (ADM ), which will cover operations at 52 plants in 16 states.
      • The settlement is the result of an unprecedented joint federal and state enforcement effort with 14 states and counties signing onto the consent decree.
      • ADM will implement broad-sweeping environmental improvements at plants nationwide that will result in a reduction of at least 63,000 tons of air pollution a year. This is the first major NSR/PSD settlement involving the grain and oilseed processing industry.
      • ADM will install state-of-the art controls on a large number of units, shut down some of the oldest, dirtiest units, and take emission limits on others. Some of the limits will likely set new standards for the industry.
      • ADM will pay a $4.6 million , which will be shared with the co-plaintiffs, and will spend $340 million over a 10-year period to implement the entire injunctive relief package, which includes $213 million on capital improvements, like air pollution control equipment. The company will also spend $6.3 million on Supplemental Environmental Projects; including school bus retrofits and wetlands projects.
Alcoa Inc. (April 9, 2003):
      • Major settlement with Alcoa Inc., that resolves violations of the Clean Air Act’s New Source Review (NSR) and Prevention of Significant Deterioration (PSD) requirements by its Rockdale, Texas, facility. Settlement will result in the annual reduction of approximately 68,000 tons of pollution. The facility is the nation’s largest emitter of sulfur dioxide (SO2) and nitrogen oxides (NOx) from the non-utility source category.
      • Alcoa will pay $1.5 million as a civil penalty, and will spend $750,000 to retro-fit diesel school buses with pollution controls in the Rockdale area. The company also will spend $1.75 million to purchase conservation areas surround the facility protecting such areas for generation to come.
      • Alcoa has three compliance options under the agreement (1) retrofit the existing units, (2) replace the existing units with new state-of-the-art generating units, or (3) permanently shutdown the existing units. Alcoa will likely spend over $330 million to install a new coal-fired power plant with state-of-the-art pollution controls.

Colonial Pipeline Company (April 1, 2003):
      • Settlement resolved Clean Water Act violations by Colonial Pipeline Company related to seven recent oil spills totaling1.45 million gallons of oil and other petroleum products into numerous rivers, streams, and wetlands from its 5,500 mile pipeline in five states.
      • Colonial will pay $34 million, the largest civil penalty a company has paid in EPA history. The monies will go to the United States’ Oil Spill Liability Trust Fund, which underwrites oil spill cleanup activities nationwide.
      • Colonial also agreed to upgrade environmental protection on the pipeline at an estimated cost of at least $30 million.
      • On Feb. 25, 1999, Colonial Pipeline Company pled guilty to criminal charges in connection with the Reedy River, S.C., spill. The company was ordered to pay a $7 million fine and serve a five-year term of probation.

Lion Oil Company (March 11, 2003):
      • EPA, DOJ and the State of Arkansas agreed to a comprehensive Clean Air Act settlement with Lion Oil Company to reduce harmful air emissions from the company's El Dorado, Ark., refinery by 1,380 tons per year.
      • The settlement requires Lion Oil to spend more than $21.5 million to install state-of-the-art pollution control technology throughout its refinery to significantly reduce emissions. These improvements will reduce annual emissions of nitrogen oxide (NOx) by approximately 530 tons, sulfur dioxide (SO2) by approximately 650 tons, particulate matter (PM) by approximately 200 tons, and significantly reduce carbon monoxide (CO) emissions from process units at the El Dorado refinery.
      • Lion Oil also will pay a $348,000 civil penalty, which the State of Arkansas will share, and spend more than $450,000 on supplemental environmental projects designed to further reduce emissions from the refinery.

Toyota Motor Corporation (March 7, 2003):
      • Clean Air Act settlement resolved government's lawsuit against Toyota Motor Corporation for Clean Air Act violations involving 2.2 million vehicles manufactured between 1996 and 1998. The settlement will cost Toyota an estimated $34 million.
      • In its complaint, the United States alleged that Toyota sold 2.2 million vehicles that were different from those described in its application for Certificates of Conformity, which allow vehicles to be legally sold if they meet Clean Air Act emission standards and other requirements.
      • Toyota agreed to spend $20 million on a supplemental environmental project that involves retrofitting an estimated 3,000 diesel vehicles, including older, high-polluting school buses and municipal buses with pollution control equipment, such as catalytic converters, filters or whole engines. These retrofits, along with the purchase of ultra-low sulfur fuels, expected to eliminate up to 220 tons of particulate matter emissions, 1,200 tons of hydrocarbon emissions, and 15,000 tons of carbon monoxide emissions.