La. pollution case settlement a record

The Louisiana Generating energy company agreed to the largest federal Clean Air Act settlement in state history for pollution emissions from its coal-powered Big Cajun II power plant, according to a joint U.S. Department of Justice and U.S. Environmental Protection Agency announcement late Tuesday.

The deal includes Louisiana Generating spending $250 million in infrastructure to reduce air pollution, $10.5 million in environmental mitigation projects and a $3.5 million civil fine penalty. Half of the civil penalty — $1.75 million — is allocated to the state of Louisiana, the announcement stated.

The federal government in 2009 sued New Jersey-based NRG Energy, a Fortune 300 corporation that owns Louisiana Generating, alleging that Big Cajun II has operated since 1997 without updated air-pollution controls. The plant near New Roads makes electricity.

Louisiana Generating consistently has been listed as the largest employer in Pointe Coupee Parish in recent years.

“The Big Cajun II Power Plant is the largest source of illegal air pollution in Louisiana,” said Ignacia Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division in the announcement. “This settlement will secure substantial reductions in harmful emissions from the plant which will have a beneficial impact on air quality for residents of Louisiana and downwind states, including low-income communities who have been historically overburdened with pollution.”

Baton Rouge-based U.S. Attorney Donald Cazayoux said Tuesday night it is a “fair, balanced settlement” for improving the environment while still protecting jobs. “This settlement represents a big win for the people of Louisiana and surrounding states, showing that we can both protect public health and the environment without taking away the electricity and jobs essential to our community,” Cazayoux said.

NRG Energy officials have in the past blamed the pollution issues on the previous owners of the electricity generating plant. Louisiana Generating and NRG Energy acquired the plant in 2000 when they paid $1 billion for bankrupt Cajun Electric Power Cooperative and negotiated long-term contracts with cooperatives around the state.

Many of those contracts last until 2025 but some expire in 2014.

For instance, earlier this year, Dixie Electric Membership Corp., called DEMCO and serving about 100,000 customers in a seven-parish Baton Rouge area, entered a 10-year contract to get its power from Cleco Power LLC starting in April 2014.

As such, Louisiana Public Service Commission Chairman Foster Campbell, of Bossier Parish, said Tuesday night he fears customers of utility cooperatives across the state might eventually be asked to pay the Louisiana Generating fines and project expenses in the form increased monthly electricity bills.

Louisiana Generating President Jennifer Vosburg said in a prepared statement Tuesday night that Big Cajun II environmental upgrades have been ongoing for more than a decade.

“This agreement provides greater strength for Big Cajun II through additional controls that will allow the plant to comply with environmental regulations both now and in the future,” Vosburg stated. “In addition, the mitigation projects covered by the agreement will provide an opportunity to give back to our community as it showcases NRG Energy’s alternative energy solutions, such as solar and electrical vehicles in Louisiana. This is a win-win-win situation — a win for the environment, a win for our customers and a win for our community.”

The settlement dictates that Louisiana Generating will achieve these emissions reductions through a combination of new pollution controls, natural gas conversion and annual emission caps at all three units at the Big Cajun II plant. Emissions of sulfur dioxide will be reduced by approximately 20,000 tons and nitrogen oxides by about 3,300 tons.

Louisiana Generating will spend an estimated $250 million in capital costs to comply with agreement through the end of 2015. The settlement also requires further air pollution reductions by 2025, which will reduce sulfur dioxide by at least an additional 4,000 tons each year.

Out of the $10.5 million the settlement includes in environmental mitigation, the projects include installing solar panels at local schools and government buildings, forestry and wetlands restoration, installing charging stations for electric vehicles, reducing nitrogen loading in the False River, and paying $1.5 million to the state for vehicle and building energy conservation programs.

Wilma Subra, an environmental chemist who provides technical assistance to the Baton Rouge-based Louisiana Environmental Action Network, said the environmental projects appear to represent an “outstanding” use of the dollars.

“It’s really good news that the Justice Department and (EPA) have reached this agreement,” Subra said Tuesday night, “and it will improve the quality of air in Louisiana, particularly in that area.”

Mark Ballard of The Advocate’s Capitol news bureau contributed to this report.