Wisconsin Power and Light Co. settles with EPA, Sierra Club

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Wisconsin Power and Light Co., a unit of Alliant Energy Corp., reached a settlement agreement with the U.S. Environmental Protection Agency (EPA) and the Sierra Club that includes a decrease in nitrogen oxide emissions by more than 50 percent over the last ten years and a reduction of mercury emissions by about 30 percent over the last three years.

Under the terms of the settlement, WPL will also pay a $1.8 million civil penalty.

The terms of the settlement are in line with WPL's energy resources strategy announced in July 2012, which called for investing more than $1 billion from 2012 through 2016 to transition WPL's generation fleet while continuing to limit emissions and advance renewable energy, according to the company.

In 2009, WPL received a Notice of Violation (NOV) from the EPA alleging that WPL made past modifications to the Columbia, Edgewater, and Nelson Dewey Stations without following appropriate pre-construction review and permitting requirements. In September 2010, the Sierra Club filed complaints against WPL in the U.S. District Courts for the Western and Eastern Districts of Wisconsin making similar allegations.

WPL maintains that it has been and remains in compliance with the law. However, WPL entered into settlement discussions as a means to avoid costs to its customers, unnecessary delays, and ongoing uncertainty associated with litigation. Settlement negotiations resulted in a consent decree, which was filed with the U.S. District Courts for the Western and Eastern Districts of Wisconsin.

The settlement agreement was reached after negotiations involving WPL, the co-owners of the Columbia Energy Center (Madison Gas and Electric Co. and Wisconsin Public Service Co.), the co-owner of Edgewater Unit 4 (Wisconsin Public Service Co.), and the former co-owner of Edgewater Unit 5 (Wisconsin Electric Power Co.), the EPA and Sierra Club. In total, all co-owners have agreed to invest $8.5 million in beneficial environmental projects over the next five years and pay a civil penalty totaling $2.45 million.

As part of the settlement, WPL will:

·      Install additional controls to reduce sulfur dioxide emissions from Edgewater Unit 5. WPL filed a construction application with the Public Service Commission of Wisconsin (PSCW) for this project on July 27, 2012 and expects a decision from the PSCW in the second quarter of this year;

·      Install additional controls at Columbia Unit 2, to reduce nitrogen oxide emissions, which will prompt a certificate of authority filing with the PSCW expected in the second quarter of 2014; and

·      Adhere to more stringent sulfur dioxide and nitrogen oxide emission limits at its coal-fired generation fleet.

Unit retirements and fuel switching:

As previously announced as part of our energy resources strategy and also as part of the settlement, WPL will:

·      Retire its older and less-efficient coal-fired units by the end of 2015; specifically:

·      Nelson Dewey Units 1 & 2 located in Cassville, WI, which total about 200 MW; and

·      Edgewater Unit 3, located in Sheboygan, WI, which is about 70 MW; and

·      Either convert to natural gas or retire Edgewater Unit 4, which is about 300 MW, by the end of 2018. WPL's ownership share of Unit 4 is about 200 MW.

WPL will invest $6.6 million in beneficial environmental projects over the next five years such as land and ecological restoration; renewable energy; and energy efficiency projects.

Outlined in the settlement are further investment in environmental controls and clean air technology that will provide additional emission reductions in nitrogen oxide, sulfur dioxide and particulate matter with the added benefit of also reducing mercury emissions at WPL's coal-fired electric generating facilities, as well as investment in other beneficial environmental projects.

WPL is one of many U.S. utility companies to receive a NOV as part of the EPA's Coal-Fired Power Plant Enforcement Initiative that began in 1998. Including WPL's settlement, there have now been more than 25 Coal-Fired Power Plant Enforcement Initiative-related settlements nationwide. This settlement is the fourth involving a Wisconsin-based utility.

Wisconsin Power and Light Co. (WPL), based in Madison, Wis., provides electric service to about 460,000 customers and natural gas service to about 180,000 customers in more than 600 communities across central and southern Wisconsin.

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