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Minnesota Power finalizes environmental agreement with EPA
Minnesota Power Co. has reached a settlement with the Environmental Protection Agency (EPA) and the Minnesota Pollution Control Agency that resolves alleged Clean Air Act violations, the utility announced Wednesday.
In August 2008, and April 2011, Minnesota Power received notices from the EPA alleging the company made past modifications at its Boswell, Laskin and Rapids Energy Centers between 1981 and 2005 without following appropriate pre-construction review and permitting requirements.
The agreement does not include any admission of wrongdoing by Minnesota Power, which is a division of ALLETE Inc. It was one of many utility companies whose investments in electric generation facilities were reviewed as part of the EPA’s Coal-Fired Power Plant Enforcement Initiative that began in 1999. The initiative has resulted in more than 25 related settlements nationwide, Minnesota Power said in a news release.
Minnesota Power executives believe the projects specified were in full compliance with the Clean Air Act. They entered into the settlement agreement to avoid unnecessary costs and delays associated with litigation, the company said.
“The company has been in discussions with the EPA since 2008 to settle this matter to avoid costly litigation, in the best interest of our customers and other stakeholders,” said ALLETE Senior Vice President, General Counsel and Secretary Deb Amberg. “We are pleased to have reached a settlement that recognizes the significant investments we’ve already made to reduce emissions.”
Since 2006, the company has invested or will invest more than $600 million to reduce sulfur dioxide, nitrogen oxide, mercury and particulate matter emissions at its thermal generation facilities. By the end of 2014, Minnesota Power will be positioned to meet Minnesota’s renewable standard of 25 percent by 2025 – more than a decade earlier than required by law.
Minnesota Power said it will also spend $4.2 million over the next five years in conservation and clean energy projects benefitting local communities, which could potentially include a forest restoration project, an electric car charging station in northeastern Minnesota and a 1 megawatt solar installation on Fond du Lac Band of Lake Superior Chippewa property.
Under the terms of the settlement, the company will also pay a $1.4 million civil penalty. In the second quarter of 2014, ALLETE recorded an after-tax expense of $2.5 million, or 6 cents per share, to reflect a liability associated with the conservation and clean energy projects. Due to its
non-recurring nature, the expense will be excluded from 2014 earnings guidance. A liability for the civil penalty was recognized in 2013.
Settlement negotiations resulted in a consent decree filed with the U.S. District Court for the District of Minnesota. Before it will be effective, the settlement must be approved by the court after a 30-day public comment period.
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