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Indianapolis Power & Light Company (IPL) reached an agreement with the United States government to resolve its alleged violations of the Clean Air Act. The deal will also settle the company’s alleged violation of the laws of the State of Indiana.

IPL is a utility company providing electric service to more than 500,000 residential, industrial, and commercial customers in Indiana. It is the owner and operator of the Petersburg Generating Station. It is a subsidiary of AES Corporation (NYSE: AES), one of the world's leading electric power companies.

Alleged violations of IPL

The U.S. Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management conducted investigations into the Petersburg Generating Station in 2008, 2015, and 2016.

After the investigations, the regulators found that IPL violated the Clean Air Act and related Indiana laws due to the following:

• Failure to obtain a permit and to install controls as required by the Prevention of Significant Deterioration provision and the Indiana State Implementation Plan (SIP).
• Emissions were in excess of opacity standards under the New Source Performance Standards for Fossil-Fuel-Fired Steam Generators, Subpart D, the Indiana SIP, and the Petersburg Generating Station’s Title V Operating Permit.

Details of the settlement

The settlement agreement, which is included in a Consent Decree, requires IPL to reduce its plant’s emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), particulate matter (PM), and sulfuric acid mist (H2SO4).

It also requires the company to install a pollution control device known as a Selective Non-Catalytic Reduction System (SNCR) on one of the plant’s coal-fired units, upgrade its sulfuric acid mitigation system, and continually operate all of its pollution control equipment to meet levels that will achieve reductions in NOx, SO2, PM and H2SO4 emissions.

Additionally, the agreement recognizes that IPL may permanently retire two of its units at the Petersburg Generating Station earlier than planned. Therefore, the company may forego installing the control device if it decides to retire the two units before July 1, 2023. Discontinuing the operations of those units will result in significant emissions reduction—greater than any reductions achieved by installing and operating the SNCR.

Furthermore, the agreement requires IPL to pay a total civil penalty of $1.525 million, of which $925,000 will go to the U.S. government and $600,000 to the State of Indiana.

Moreover, the agreement requires IPL to undertake a project costing $5 million to mitigate the harm to the environment caused by the plant’s excess emissions over the years.

In a statement, Lisa Krueger, president of the U.S. strategic business unit for The AES Corporation, said, “We are pleased to have worked with federal and state officials to conclude longstanding discussions with an agreement that recognizes our progress in accelerating a safer and greener energy future through pollution control measures and a significant reduction in emissions.”

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