By Collin Roth

On Friday, the Environmental Protection Agency (EPA) announced a proposed settlement with the Wisconsin Public Service Corporation (WPS) that will force the company to pay a civil penalty of $1.2 million, invest $300 million in pollution control technology, and will be forced to spend $6 million on “environmental mitigation projects.” The heavy-handed EPA decision prompted a statement from the Northern Wisconsin energy company claiming “the settlement along with current economic conditions will likely lead to employee staff reductions within its energy supply operations area.”

The EPA alleges that two WPS coal-fired power plants in Wausau and Green Bay were in violation of the Clean Air Act and the settlement with WPS is “part of a national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements.”

According to the energy company:

The EPA filed a Notice of Violation against WPS in November 2009 alleging that the utility had not obtained the proper air permits for improvements it made to electric generating units to ensure electric reliability as far back as 1994. WPS does not admit any wrongdoing.

“We acted then using what we believed to be the proper process for making the improvements,” said Terry Jensky, WPS Vice President of Generation Assets. “Many utilities across the country followed the same procedures and they have or are now facing similar action from the EPA.”

In the settlement, WPS agreed to retire, refuel or repower its coal-fired Weston Plant units 1 & 2 (near Wausau, WI), as well as Pulliam Plant units 5 & 6 in Green Bay. The deadline for completing the activities is June 1, 2015. All of these actions are consistent with our evolving generation strategy as we align our portfolio to the best interests of our customers and other stakeholders.

The settlement included a provision for WPS to install its previously announced innovative ReACT™ environmental controls at its Weston 3 generator (321 megawatts). The system will reduce emissions of several pollutants and will position the unit to be in compliance with future EPA regulations. The ReACT™ installation will be the first commercial application of this technology in the United States. After detailed review and analysis, WPS opted to move forward with ReACT™ in advance of the settlement.

In addition to the civil penalty and the investment of $300 million in pollution control technology that WPS claims they were already in the process of installing, WPS must pay $6 million for “environmental mitigation projects.” According to the EPA, WPS will have to pay $250,000 each to the U.S. Forest Service and National Park Service, pay to enhance existing wind and hydroelectric facilities in Wisconsin, fund a wood-stove change out program, and development of a community manure digester. Remaining funds could be tasked towards natural gas and hybrid fleet replacements or the installation of solar panels on public buildings.

The Green Bay headquartered Wisconsin Public Service Corporation serves 441,000 electric customers and 319,000 natural gas customers in Wisconsin and Michigan’s Upper Peninsula. The EPA’s settlement with the energy company will not only kill jobs but will likely force higher rates on ratepayers.

The proposed settlement is subject to a 30-day public comment period and court approval.