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U. S. Announces Clean Air Act Coal-fired Power Plant Settlement with Alcoa - Settlement Will Reduce Nitrogen Oxide and Sulfur Dioxide Emissions from Facility by More than 90 Percent

Release Date: 04/09/2003
Contact Information:

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

WASHINGTON, D.C. (04/09/03) - The Justice Department and the Environmental Protection Agency today announced a major Clean Air Act settlement with Alcoa, Inc. under which the company will spend an estimated $330 million to install a new coal-fired power plant with state-of-the-art pollution controls to eliminate the vast majority of sulfur dioxide and nitrogen oxide emissions from the power plant at Alcoa’s aluminum production facility in Rockdale, Texas.
Today’s settlement is the latest in a series of cases the Bush Administration has pursued to bring the coal-fired power plant industry into full compliance with the Clean Air Act. This settlement also reflects the culmination of well-coordinated efforts between federal and state regulators, as well as certain citizen groups in the area of the Rockdale plant, to bring Alcoa’s operation into compliance with the Clean Air Act.

Today’s settlement resolves allegations filed in federal court by the United States and its co-plaintiffs, Neighbors for Neighbors, Inc., Environmental Defense, and Public Citizen, that Alcoa has unlawfully operated the Rockdale facility since it overhauled the Rockdale power plant without installing necessary pollution controls and without first obtaining proper permits required by the “New Source Review” program of the Clean Air Act.

“Ensuring that Americans have clean air to breathe is a priority for the Justice Department,” said Attorney General John Ashcroft. “As a result of today's settlement, the town and communities of Rockdale will have the peace of mind of knowing that their citizens will breathe cleaner air for generations to come.”

“This settlement is an excellent example of how the federal government, states, and citizen groups can work together to find solutions to environmental problems,” said EPA Administrator Christie Whitman. “This settlement will result in the reduction of tons of harmful pollutants while providing the facility options to achieve compliance. This shows how EPA ‘smart enforcement’ is about more than numbers. It means cleaner air, purer water, and better protected land.”

Texas Commission on Environmental Quality's executive director Margaret Hoffman said, “As a result of this joint investigation and cooperative effort between state and federal officials, Texans will enjoy cleaner air. That's a victory for everyone.” The State of Texas was a full partner in the negotiations leading to the settlement and will play a significant role in implementing the settlement.

The Rockdale facility, located northeast of Austin, is currently the single largest non-utility source of nitrogen oxide and sulfur dioxide emissions in the nation. Prevailing winds carry air pollutants directly into the Austin metropolitan area. The plant consists of two aluminum smelters, a power plant that generates electricity for the smelters, and a strip-mining operation that supplies lignite coal for the power plant itself. The company produces aluminum for cans, truck wheels, die-casts, machinery, systems and components for appliances, as well as telecommunications.

The combined effect of the pollution controls mandated by the settlement will be to reduce the company’s emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) by approximately 90 percent. More than 52,000 tons of SO2 and 15,000 tons of NOx – a total of more than 68,000 tons of pollutants – are expected to be removed from the air of central Texas each year.

SO2 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.

In the 1980s, just as the Rockdale power plant was nearing the end of its useful life, Alcoa undertook a $63 million program known as the “Betterment Project” to extend the life of the Rockdale power plant, rather than retire the power plant and build a new facility with state-of-the-art pollution controls. The “Betterment Project” did little to better the environment, however. After the completion of the four-year program, pollution from the Rockdale facility increased over 13,000 tons each year as a result of Alcoa’s changes.

Under the terms of the settlement, Alcoa will elect, within roughly one year, one of three options for achieving the required emissions reductions: to install state-of-the-art pollution controls for SO2 , NOx, and particulate matter (PM) on its existing power plant; to replace its existing power plant with new electricity generating units and pollution controls; or, if the aluminum production facility is to discontinue operations, to shut down the power plant completely. Alcoa will implement one of these changes by the end of 2007, and will implement additional pollution reduction measures in the interim as well. Last fall, Alcoa submitted a permit application for new power plant units to the Texas Commission on Environmental Quality, indicating that Alcoa intends to pursue the option of replacing its existing units with new units and pollution controls.

In addition to the pollution reductions secured by the settlement, Alcoa has agreed to pay a civil penalty of $1.5 million, and spend at least $2.5 million on two additional projects that will partially offset the impact of past emissions. Specifically, Alcoa will provide roughly $1.75 million to the Trust for Public Lands and the Pines & Prairie Land Trust to purchase conservation easements in the area around the Rockdale facility. Alcoa also will spend $750,000 to retrofit school buses in the greater Austin area with pollution control devices, contributing toward a national initiative unveiled by Administrator Whitman this week.

The settlement was lodged today with the United States District Court in Austin, and is subject to a 30-day public comment period before it can be entered by the court.