Westar Energy Inc. (WR) agreed to install a pollution-control system at a coal-fired power plant and pay a $3 million penalty to settle an environmental lawsuit filed by the Justice Department.
The company's general counsel, Larry Irick, said Westar obeyed all environmental laws and regulations but chose to settle because it meant money would go to cleaning up the environment rather than to litigation.
"Investments will really do something for the environment, but protracted litigation won't accomplish any environmental benefit no matter how the case turns out," he said.
In addition to the civil penalty and a commitment to $6 million in environment-mitigation investments over six years, Westar said it would install a selective catalytic reduction system on one of the three coal units at its Jeffrey Energy Center in Kansas by the end of 2014. It may install another in the following two years, depending on the success of the first. The systems reduce nitrogen-oxide emissions.
The company also said the planned installation of new low-nitrogen oxide burners and electrostatic precipitators, which reduce ash, will go forward as planned.
President and Chief Executive Bill Moore noted that in the past several years, Westar has spent invested several hundred million dollars "to improve the environmental performance of our coal plants."
In its suit filed almost a year ago, the U.S. Department of Justice said Westar violated federal air quality laws by failing to update the plant's pollution-control equipment when it made major modifications there over the past decade. The DoJ claimed the pollution upgrades are required whenever a utility makes large changes to a power plant. Westar at the time defended itself as "good environmental stewards," saying it had invested almost $500 million in recent years to cut emissions.
Westar shares were up 0.5% at $21.66 in recent trading.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; email@example.com