Minnesota Power Finalizes Environmental Agreement with EPA
July 16 2014 - 1:50PM
Business Wire
Minnesota Power, a utility division of ALLETE, Inc. (NYSE: ALE),
has reached a settlement agreement with the Environmental
Protection Agency (EPA) and the Minnesota Pollution Control Agency
that resolves alleged violations of the New Source Review
provisions of the Clean Air Act. The agreement does not include any
admission of wrongdoing on the part of the company.
Minnesota Power is one of many utility companies in the U.S.
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.
“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. It
is consistent with our EnergyForward resource strategy to
reduce emissions, diversify our energy mix and advance renewable
energy.”
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.
Retrofits to comply with state and federal regulations at its two
largest units – Boswell 3 and Boswell 4 – will result in a 90
percent reduction in mercury emissions. Many of the emission
control measures were implemented during the six year discussions
to resolve the Notice of Violation (NOV).
“As a regulated utility providing an essential service, we must
always take a long-range planning view to meet our electric
customers’ needs in the most cost-competitive and reliable manner,”
said Al Rudeck, Minnesota Power Vice President of Strategy and
Planning.
As part of its EnergyForward strategy toward achieving a
diversified and more flexible energy mix, the company has secured
600 megawatts of new wind capacity, dramatically growing its carbon
emission-free renewable portfolio. 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.
The settlement agreement covers Minnesota Power’s Boswell,
Laskin, Taconite Harbor and Rapids Energy Centers and includes more
stringent emissions limits than in current air permits at all
affected units, and the option of refueling, retrofits and
retirements at some units. It also includes the addition of 200
megawatts of wind energy. Minnesota Power 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 $0.06 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.
In August 2008, and April 2011, Minnesota Power received NOVs
from the EPA alleging that Minnesota Power made past modifications
at its Boswell, Laskin and Rapids Energy Centers between 1981 and
2005 without following appropriate pre-construction review and
permitting (New Source Review) requirements.
While Minnesota Power believes the projects specified in the
NOVs were in full compliance with the Clean Air Act, NSR
requirements and applicable permits, it entered into the settlement
agreement to avoid unnecessary costs and delays associated with
litigation. 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.
Minnesota Power provides electric service within a
26,000-square-mile area in northeastern Minnesota, supporting
comfort, security and quality of life for 144,000 customers, 16
municipalities and some of the largest industrial customers in the
United States. More information can be found at
www.mnpower.com.
The statements contained in this release and statements that
ALLETE may make orally in connection with this release that are not
historical facts, are forward-looking statements. Actual results
may differ materially from those projected in the forward-looking
statements. These forward-looking statements involve risks and
uncertainties and investors are directed to the risks discussed in
documents filed by ALLETE with the Securities and Exchange
Commission.
Minnesota Power/ALLETEAmy Rutledge, 218-723-7400Manager -
Corporate Communicationsarutledge@mnpower.com
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