Arizona public utility Salt River Project has agreed to adopt emissions-reduction technologies at one of its coal-fired power plants as part of a legal settlement with the U.S. Environmental Protection Agency.
According to an EPA announcement Tuesday, the utility will spend $400 million to install technologies to clean up the plant, pay a $950,000 fine and will fork out an additional $4 million for community-based environmental projects, such as retrofitting public school buses with emission-reducing equipment and installing solar panels on school roofs.
The agreement marks the 15th settlement from EPA lawsuits aiming to reduce sulfur-dioxide and nitrogen-oxide emissions at power plants.
The lawsuits stem from a Clean Air Act provision called the New Source Review, a permitting program that seeks to keep new and modified industrial buildings from harming the environment.
More companies also face EPA allegations. The U.S. Department of Justice has issued complaints against four additional companies: Duke Energy Corp., Cinergy Corp. (now owned by Duke Energy), Alabama Power and Kentucky Utilities Co.
All the legal action is clearly pushing power companies to adopt cleaner coal technologies, said Gary Gibbs, vice chairman of the Clean Coal Technology Foundation of Texas, who added that increasingly strict emissions standards are adding to the push.
The clean-coal industry is likely to keep an eye on Salt River Project's progress because the undertaking marks a rare instance of an existing coal-fired plant being retrofitted with state-of-the-art catalytic technology, he said.
Selective-catalytic-reduction technology uses a chemical reaction to reduce nitrogen oxides, or NOx.
Similar technology is already used in vehicles, where catalytic converters are integrated into exhaust systems to convert harmful pollutants into less-harmful emissions before they leave the tailpipe.
But applying the technology to an existing coal-fired power plant is expensive and unusual, Gibbs said.
Gibbs also manages government affairs in Texas for utility American Electric Power (NYSE: AEP). In October, the utility reached one of the biggest EPA coal-fired power plant settlements when it agreed to pay about $4.6 billion to reduce its emissions, along with a $15 million fine.
Gibbs said installing catalytic technology when a coal-fired power plant is being built is easier and cheaper because it can be engineered into the architectural plans.
But integrating the technology into an existing structure is a whole new challenge. "It's the size of a large house turned on its end and stuck to the side of a power plant," he said.
Salt River Project also has agreed to install flue-gas-desulfurization technology, which uses an absorbent material - usually lime or limestone -- to remove sulfur-dioxide emissions. It will also install continuous monitoring systems for particulate-collection technology the plant already has in place.
Upon fulfilling the terms of its settlement, Salt River Project will reduce its NOx and SO2 emissions by more than 21,000 tons per year, according to the EPA.
Gibbs said he hopes the EPA lawsuits will lead to technological breakthroughs that make it cheaper for older plants to reduce their emissions.