Duke Energy Corporation Clean Air Act (CAA) Settlement

(Washington, DC – September 10, 2015) EPA and the Department of Justice announced today a consent decree with Duke Energy Corporation involving coal-fired power plants in North Carolina. 

Overview of Company

Duke Energy Corporation supplies and delivers energy to approximately 7.3 million U.S. customers. Duke has approximately 57,500 megawatts (MW) of electric generating capacity in the Carolinas, the Midwest and Florida.  

Violations

This case has a lengthy litigation history starting from an original complaint filed by the United States in 2000 alleging that Duke violated the Prevention of Significant Deterioration (PSD)/New Source Review (NSR) program by making major modifications to 25 coal fired units at eight coal fired power plants without obtaining proper permits and installing proper pollution control technology. Several co-plaintiff environmental groups, including Environmental Defense, North Carolina Public Interest Research Group, and North Carolina Sierra Club, intervened in the case in 2001.

After initial proceedings in the District Court, the case went to the Fourth Circuit and U.S. Supreme Court on various significant issues of law in the PSD program, which resulted in a landmark 2007 Supreme Court decision agreeing with EPA that the PSD provisions apply to major modifications that increase a plant’s actual annual emissions.

After remand, in 2011, the United States narrowed the case to 13 alleged major modification, and trial was set to begin in October 2015. This consent decree resolves all of the remaining PSD claims at five plants (13 units), including:

• Allen (Units 1 and 2)
• Buck (Units 3, 4, and 5)
• Cliffside (Units 1, 2, 3, and 4)
• Dan River (Unit 3)
• Riverbend (Units 4, 6, and 7)

Injunctive Relief and Pollutant Reductions

Eleven of the 13 units have recently shutdown, and this consent decree requires those shutdowns to be permanent and an enforceable obligation.  At the Allen plant, Duke must permanently retire Allen Units 1 and 2 (165 MW each) by 2024. In the interim, Duke must continuously operate existing nitrogen oxide pollution controls at Allen Units 1 and 2 and comply with a 365-day rolling average emission rate of 0.250 pounds per million British Thermal Units (lb/mmBTU). Each unit must also meet a nitrogen oxides (NOx) tonnage cap of 600 tons per year (tpy). Similarly, Duke must continuously operate existing sulfur dioxide (SO₂)  pollution controls at Allen Units 1 and 2 and comply with a 365-day rolling average emission rate of 0.120 lb/mmBTU. In addition, to help mitigate the harm from the alleged violations, the settlement requires Duke to retire an additional 265 MW unit at the Allen plant by 2024.

The EPA estimates that the settlement will reduce emissions by approximately 2,300 tons per year from the three Allen units, as compared to recent emission levels. With these additional retirements, total emissions from all thirteen allegedly modified units – which were in excess of 51,000 tons in 2000 when the suit was filed – will be zero. 

Health Effects and Environmental Benefits

The pollutants reduced under this settlement have numerous adverse environmental and health effects. Sulfur dioxides and nitrogen oxides can be converted to fine particulate matter (PM) once in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. Other health and environmental impacts from the pollutants addressed in this settlement include the following:

• Sulfur dioxide – High concentrations of SO₂ affect breathing and may aggravate existing respiratory and cardiovascular disease.  Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children, and the elderly.  Sulfur dioxide is also a primary contributor to acid deposition, or acid rain.
• Particulate matter – Short term exposure to particulate matter can aggravate lung disease, cause asthma attacks and acute bronchitis, may increase susceptibility to respiratory infections and has been linked to heart attacks.
• Nitrogen oxides – Nitrogen oxides can cause ground-level ozone, acid rain, particulate matter, global warming, water quality deterioration, and visual impairment. Nitrogen oxides play a major role, with volatile organic chemicals, in the atmospheric reactions that produce ozone.  Children, people with lung diseases such as asthma, and people who work or exercise outside are susceptible to adverse effects such as damage to lung tissue and reduction in lung function.

Environmental Mitigation Projects

The proposed consent decree requires Duke to spend at least $4.4 million on environmental mitigation projects. Some projects are mandatory and some are optional, as described below.

• Forest Service/National Park Service (NPS):
  Duke must pay $175,000 each to the U.S. Forest Service and the National Park Service. The Forest Service project will involve the restoration of soil calcium to support healthy forests on lands on the Cherokee, Nantahala, and/or Pisgah National Forests. The NPS project will involve the restoration of native brook trout and/or the revegetation of Red Spruce trees in Great Smoky Mountain National Park. These projects will help mitigate some of the harmful effects of acid deposition on plants and animals. Duke also has the option to pay an additional $175,000 to these agencies to support the same projects.
• Installation of Electric Vehicle Charging Infrastructure:
  Duke has the option to submit a plan to the EPA for a project to enhance electric vehicle charging infrastructure in North Carolina. Battery powered and some hybrid vehicles need plug-in infrastructure to recharge the batteries. Lack of a charging infrastructure is a major barrier to adoption of electric vehicles. Establishment of electric vehicle charging stations could expand the useful driving range of electric vehicles as well as encourage drivers to purchase electric vehicles for local and commuting use.
• Advanced Truck Stop Electrification Project:
  Duke has the option to submit a plan to the EPA for the installation of advanced truck stop electrification equipment in North Carolina. Long-haul truck drivers often idle their engines during rest stops to power vehicle systems, such as to supply heat or cooling in their sleeper cab compartments, and to maintain vehicle battery charge while electrical appliances such as TVs, computers and microwaves are in use. Modifications to rest areas to provide access to electrical power will allow truck drivers to turn their engines off. Truck driver utilization of the advanced truck stop electrification will result in reduced idling time and therefore reduced fuel usage, reduced emissions of PM, NOx, VOCs and toxics, and reduced noise, as idling trucks typically use about 1 gallon of diesel fuel/hour, creating emissions and noise pollution.
• Residential Wood-burning Appliance Change-Out Program:
  Duke must submit a plan to the EPA for a minimum of $500,000 to sponsor a wood burning appliance (e.g., stoves, boilers and fireplaces) replacement and retrofit program that would be implemented by one or more third-parties. This project must give priority to areas located within a geography and topography that make them susceptible to high levels of particle pollution and that have a significant potential for replacement of older and/or higher-polluting wood or coal-burning appliances, such as the Eastern Band of Cherokee Indians community in North Carolina including the counties of Jackson, Cherokee, Graham, Haywood, and Swain, as well as Mecklenburg county.
• Clean Energy/Energy Efficiency:
  Duke must submit a plan to the EPA, ata maximum of $600,000, for the purchase and installation of clean air energy generation resources and/or environmentally beneficial energy efficiency measures in economically distressed counties within Duke’s service territory.  

Civil Penalty

Duke will pay a total of $975,000 in civil penalties to the United States.

Comment Period

The proposed settlement, lodged in the U.S. District Court for the Middle District of North Carolina is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice (DOJ) website.

The Power Plant Enforcement Effort

This judicial settlement secured by DOJ and EPA, is part of a national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s NSR/PSD requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.

For more information, contact:

Seema Kakade
Air Enforcement Division
U. S. Environmental Protection Agency
1200 Pennsylvania Ave, NW, MC 2242A
Washington, DC 20460
(202) 564-2416
[email protected]