Utilities in Alabama and North Dakota expect to spend at least $535 million under settlements resolving clean air disputes with the federal government

Alabama Power will spend more than $400 million to install two scrubbers at a coal-fired plant near Birmingham, while two electric cooperatives in North Dakota expect to spend at least $100 million installing one scrubber and upgrading another at a lignite plant they own together located near Center, N.D.

Alabama Power will install scrubbers at two units at Plant Miller, which federal officials said should have been built following the requirements of newer environmental laws. The plant received permits for four units before the New Source Review provisions to the Clean Air Act were implemented, but the Department of Justice said the timing of construction at two units put them under the requirements of the new rules. The first two units at the 2,664-MW plant were completed in 1978 and 1985, but the second two were completed in 1989 and 1991.

Under the agreement, the U.S. Dept. of Justice absolved Alabama Power of wrongdoing for the upgrades at an additional four plants. The government argued that work at those plants created new sources of emissions, which would have required additional emission controls under the Clean Air Act.

The company also will spend about $100,000 to install mercury-monitoring equipment at the plant by Dec. 31, 2008.

Other emission reductions will be made using existing equipment, Willard Bowers, vice president for environmental affairs at Alabama Power said. The selective catalytic reduction systems at Plant Miller, which operate now between May and September, will begin operating year round beginning May 1, 2009.

The utility will reduce particulate matter emissions by Dec. 31, which can be done with existing equipment, Bowers said.

The consent decree, which must be approved by the U.S. District Court for the Northern District of Alabama, effectively will put the plant in compliance with the Clean Air Interstate Rule, Bowers said. “But now we have a date we have to meet rather than having the flexibility in the rule,” he said.

Under the agreement, which has been under negotiation since June 2005, the utility agreed to pay $100,000 fine under a consent decree to resolve the Plant Miller violations. Alabama Power has volunteered to retire $4.9 million worth of sulfur dioxide emissions allowances by donating them to a non-profit organization.

The consent decree will have a 30-day public review before the court takes action.

In North Dakota, the Environmental Protection Agency claimed that several modifications at the 750-MW M.R. Young Station triggered requirements to install best available control technology. The utility says it does not agree with the allocations, but has elected to settle the issue. “This agreement will allow Minnkota to focus on future emission reductions that will allow us to build a possible third generating unit at the Young plant site,” says John Graves, Minnkota’s environmental manager.

The utilities expect to spend at least $135 million installing and upgrading equipment to reduce emissions, says David Loer, Minnkota’s president and CEO.

A new scrubber will be installed on one unit and the existing scrubber on the second unit will be upgraded to reduce SO2 emissions by 90 to 95 percent. The upgrades will require the construction of at least one, and possibly two 550-ft. tall stacks at the plant, says Graves.

Nitrogen Oxides removal systems also will be installed. The first phase will include oven-fired air system to be built at both units by 2009. The second phase of the emission reduction plan requires that a nitorgen oxides best available control technology yet to be determined by installed by 2011.

The North Dakota utilities also will fund $5 million in renewable energy development projects.

The consent decree was filed with the U.S. district Court for the District of North Dakota. It is subject to a 30-day comment period.