Enforcement

Dominion Energy, Inc.

(Washington, DC - April 1, 2013) The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today that Dominion Energy has agreed to pay a $3.4 million civil penalty and spend approximately $9.8 million on environmental mitigation projects to resolve Clean Air Act (CAA) violations.

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Overview of Company

Dominion Energy is a Richmond-based subsidiary of Dominion Resources, Inc., an investor-owned electric and natural gas utility that is one of the nation’s largest producers and transporters of energy, operating in the Midwest, Mid-Atlantic and Northeast regions. The Dominion family of companies serves 6 million customers, with 28,200 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline, and 63,100 miles of electric transmission lines. The company’s service area includes Massachusetts, Rhode Island and Connecticut in the Northeastern United States; Pennsylvania, West Virginia, Virginia and North Carolina in the Mid-Atlantic; and Ohio, Indiana, Illinois and Michigan in the Midwest.

In 2010, Dominion operated a dozen coal-fired facilities, including the three plants that are covered in the settlement. The three covered plants are the State Line plant in Hammond, Indiana, the Kincaid plant in central Illinois, and the Brayton Point plant in Somerset, Massachusetts. The Kincaid plant consists of two cyclone boilers designated as Units I and 2, each with a rated capacity of 579 net MW. The State Line plant consists of two coal-fired generating units designated as Units 3 and 4, with a rated capacity of 197 net MW and 318 net MW, respectively. The Brayton Point plant consists of three coal-fired units designated as Units 1, 2 and 3, with a rated capacity of 244 net MW, 244 net MW and 612 net MW, respectively.

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Violations

As part of the National Coal-Fired Power Plant Enforcement Initiative, the EPA began an investigation of the Dominion system in 2008. Based upon Dominion’s response to the EPA’s CAA Section 114 Information Requests and other information obtained during its investigation, EPA concluded that there were PSD violations at some of Dominion’s plants. On April 16, 2009, EPA issued a Notice of Violation to Dominion generally alleging that Dominion performed projects that triggered PSD applicability at the State Line and Kincaid plants. The EPA has also alleged violations of Title V of the CAA for failure to submit an application to include all applicable requirements in Dominion’s Title V permits.

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Injunctive Relief

The consent decree secures injunctive relief from the State Line, Kincaid and Brayton Point plants. Compliance with the settlement will reduce sulfur dioxide (SO2) and oxides of nitrogen (NOx) by approximately 71,000 tons per year from 2010 levels. Dominion must install or upgrade pollution control technology on two plants and permanently retire the third plant. The capital cost of the new pollution controls is estimated to be approximately $325 million.

Specifically, the settlement includes:

  • Retirement of the State Line Power Station.
  • The optimization of existing NOx controls at Brayton Point and Kincaid. Meeting unit specific NOx emission rates at each of these units.
  • The optimization of current dry scrubbers at Brayton Point Units 1 and 2, and the installation of a new dry scrubber at Brayton Point Unit 3. Installation of dry sorbent injection (DSI) at the Kincaid units. Meeting unit-specific SO2 emission rates at each of the Brayton Point and Kincaid units.
  • Compliance with annual system tonnage limitations for NOx and SO2.
  • Optimization of existing PM controls to meet unit-specific emissions limitations
  • Annual surrender of any excess SO2 and NOx allowances resulting from actions taken under the consent decree

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Pollutant Reductions

As compared to Dominion’s 2010 emissions, EPA expects the following emission reductions to result from this settlement:

  • SO2 about 49,000 tons per year
  • NOx about 22,000 tons per year

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Health and Environmental Effects

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 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 - Particle pollution, especially fine particles, contains microscopic solids or liquid droplets that are so small that they can get deep into the lungs and cause serious health problems. Exposure to such particles can affect both the lungs and heart. Numerous scientific studies have linked particle pollution exposure to a variety of problems, including premature death in people with heart or lung disease, nonfatal heart attacks, irregular heartbeat, aggravated asthma, decreased lung function, and increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty breathing. People with heart or lung diseases, children, and older adults are the most likely to be affected by particle pollution exposure. However, even if you are healthy, you may experience temporary symptoms from exposure to elevated levels of particle pollution.
  • 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 compounds, 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.

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Environmental Mitigation Projects

The proposed consent decree requires Dominion to spend not less than $9.75 million on environmental mitigation projects. Dominion will pay $750,000 to the National Park Service and Forest Service for projects to mitigate the harmful effects of acid deposition caused by power plants on park and forest service lands surrounding each plant.

The remaining $9,000,000 project dollars will be divided among the following environmental mitigation projects, assuring that $3,625,000 is spent on projects within Massachusetts, Rhode Island and Connecticut, while the balance of $5,375,000 will be spent on projects in Indiana and Illinois:

    (1) Energy efficiency, weatherization and renewable energy projects utilizing geothermal and solar energy to supply energy for local schools, a new food bank and/or other municipal buildings. Dominion will be contributing up to $2.2 million for these projects. Beneficiaries of these efforts will include the South Fork School District 14 in Kincaid Illinois, Central Illinois FoodBank in Springfield, Illinois, as well as the communities of Somerset and Fall River in Massachusetts.
    (2) Wood Stove Changeout programs through which Dominion will spend up to $2,025,000 to sponsor a wood-burning appliance changeout and retrofit project in Bristol, Plymouth and Norfolk Counties in Massachusetts, in Bristol, Newport, Providence, Kent and Washington Counties in Rhode Island and in New London and Windham Counties in Connecticut. Dominion will spend an additional $525,000 on a like project in Christian County in Illinois, Lake County in Indiana, and adjacent counties in Illinois and Indiana. To qualify for replacement, retrofitting or upgrading, the older wood-burning appliance must currently be used as a source of residential heat. The intent of the projects would be to reduce fine particle pollution and hazardous air pollutants in areas impacted by emissions from the Brayton Point, State Line and Kincaid plants;
    (3) The Lake Michigan Watershed and Indiana Dunes National Lakeshore Land Acquisition and Restoration Project calls for Dominion to submit to EPA a plan to use up to $2,500,000 for acquisition and restoration of lands that have ecological or environmental significance to the ecosystems in the Lake Michigan Watershed within Lake and Porter Counties in Indiana. The purpose of this project is to protect ecologically significant land within the watershed and this spending will be in addition to the funding being supplied to the Forest Service and Park Service for land acquisition purposes;
    (4) The Switcher Locomotive Idle Reduction Project requires Dominion to spend $400,000 for the installation of the electrical infrastructure to support locomotive layover heating systems, as well as the installation of layover heating systems on an estimated twelve locomotives to reduce locomotive idling in Chicago rail yards. The intent of the project would be to reduce fuel usage and emissions of PM, NOx, VOCs and other toxics, as well as to reduce noise in a densely urban environment; and
    (5) Clean Diesel projects obligating Dominion to for Dominion to spend up to $500,000 to fund retrofit, replacement or repowering of buses and trucks in the Chicagoland and Kincaid areas, additional funding for the retrofit or repower higher-polluting engines in Somerset and Fall River Massachusetts, and up to $500,000 to fund clean air projects that will significantly reduce diesel emissions from diesel-powered vehicles based and operating in or near the Indiana cities of Gary, Hammond, Michigan City, South Bend, Elkhart and/or Fort Wayne. These projects will involve the retrofit of school buses and other diesel engine-powered vehicles with emission control equipment, the replacement of diesel engines with cleaner engines, or the replacement of school buses.

Dominion will submit plans to the EPA, for review and approval, identifying which of these projects it intends to perform, the proposed amount(s) to be spent on the projects, the schedule for implementing the projects, and, finally, reports on the completion of these projects including the expenditures and the emission reductions or other environmental benefits achieved.

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Civil Penalty

Dominion will pay a total of $3.4 million in civil penalties.

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Comment Period

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

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The Power Plant Enforcement Effort

This is the 26th judicial settlement secured by DOJ and EPA, as part of a national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The 71,000 tons total combined sulfur dioxide and nitrogen oxides emission reductions secured in this settlement will continue the progress of this initiative towards the projected goal of emissions reductions exceeding 2 million tons each year, once all the required pollution controls have been installed and implemented.

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For more information, contact:

Seema Kakade
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
(202) 564-2416
kakade.seema@epa.gov

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