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Wisconsin Public Service Corporation Settlement

(Washington, DC - January 4, 2013) - The Wisconsin Public Service Corporation (WPS) will invest approximately $300 million in pollution control technology, pay a civil penalty of $1.2 million, and spend $6 million on environmental mitigation projects to resolve violations of the Clean Air Act (CAA), according to the terms of a settlement with the United States, announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA).

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Overview of Company

Wisconsin Public Service Corporation, a wholly owned subsidiary of Integrys Energy Group, Inc., is an investor-owned electric and natural gas utility headquartered in Green Bay, Wisconsin. It serves approximately 441,000 electric customers and 319,000 natural gas customers in residential, agricultural, industrial, and commercial markets. The company's service area includes northeastern Wisconsin and an adjacent portion of Michigan’s Upper Peninsula. Wisconsin Public Service privately owns and operates the J. P. Pulliam and Weston coal-fired power plants, both located in Wisconsin, with a total capacity of approximately 1,300 mega watts (MW). The Pulliam plant consists of four coal-fired electric utility steam generating units identified as Units 5-8, with a rated capacity of 50 MW, 62, MW, 75 MW, and 125 MW, respectively. The Weston plant consists of four coal-fired units, Units 1-4, with a rated capacity of 60 MW, 75 MW, 322 MW, and 535 MW, respectively.

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As part of EPA’s Power Plant Initiative, EPA began an investigation of the WPS system in 2000. Based upon WPS’s response to EPA’s CAA Section 114 Information Requests and other information obtained during its investigation, EPA concluded that there were prevention of significant deterioration (PSD) violations at some of the WPS’s plants. On November 18, 2009, EPA issued a Notice of Violation to WPS generally alleging that WPS performed projects that triggered PSD applicability at the Pulliam and Weston plants. The EPA also alleged violations of Title V of the CAA for failure to submit an application to include all applicable requirements in WPS’s Title V permits. The parties initiated settlement discussions in January 2010.

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Injunctive Relief

The consent decree secures injunctive relief from all of WPS’s coal-fired power units. Compliance with the settlement will reduce sulfur dioxide (SO2), oxides of nitrogen (NOx), and particulate matter (PM) by approximately 15,000 tons per year from 2010 levels. WPS estimates that the cost of the injunctive relief will be approximately $300 million.

The settlement includes:

  • Retirement, refueling, or repower Pulliam Units 5 and 6 and Weston Units 1 and 2 by mid-2015
  • Installation of ReACT at Weston Unit 3 on or before December 2016, and compliance with a 30-Day Rolling Average NOx Emission Rate of no greater than 0.100 lb/mmBTU and an SO2 rate of no greater than 0.080 lb/mmBTU
  • Continuous operation of the existing SCR and FGD at Weston Unit 4 and compliance with a 30-Day Rolling Average NOx Emission Rate of no greater than 0.060 lb/mmBTU and a 30-Day Rolling Average SO2 Emission Rate of no greater than 0.080 lb/mmBTU
  • Compliance with annual system tonnage limitations for NOx and SO2
  • Optimization of existing PM controls to meet units-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 WPS’s 2010 emissions, EPA expects the following emission reductions to result from this settlement:

  • SO2 about 12,000 tons per year
  • NOx about 2,500 tons per year
  • PM about 500 tons per year

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Health and Environmental Benefits

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 – Short term exposure to particulate matter can aggravate lung disease, cause asthma attacks and acute bronchitis, may increase susceptibility to respiratory infections and has been linked to heart attacks.

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 chemicals, 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 WPS to spend not less than $6 million on environmental mitigation projects. WPS will provide the U.S. Forest Service and the National Park Service each with $250,000 for land restoration projects.  Additionally, under the proposed decree, WPS must perform the following projects: (1) renewable energy resource enhancements for existing wind farms and hydroelectric facilities; (2) wood stove change out program; and (3) development of a community manure digester. The remaining mitigation dollars can be apportioned to implement one or more of the following projects: (1) compressed natural gas or hybrid fleet replacements and (2) installation of conventional flat panel or thin film solar and/or solar thermal water systems in government or non-profit buildings. WPS will submit a plan to EPA, for review and approval, identifying which of these projects it intends to perform, the proposed amount(s) to be spent on the projects, and the schedule for implementing the projects.

The Forest Service and the National Park Service will each use $250,000 on projects to address the damage done from WPS’s alleged excess emissions. The Forest Service Project(s) will focus on focus on one or more areas alleged to have been injured by emissions from WPS System plants, including but not limited to the Chequamegon-Nicolet National Forest and the Manistee National Forest. The National Park Service Project(s) will focus on one or more areas alleged to have been injured by emissions from WPS System plants, including but not limited to Pictured Rocks National Lakeshore, Sleeping Bear Dunes National Lakeshore, Keweenaw National Historic Park, Apostle Islands National Lakeshore, Mississippi River and Recreation Area, Saint Croix National Scenic Riverway, and Effigy Mounds National Monument. The project(s) will restore areas adversely impacted by the WPS system’s SO2 emissions that resulted, in part, from the deposition of acid rain.

The Community Digester Project requires WPS to propose a plan to spend up to $300,000 to fund a project to reduce pollutants through conversion of food and/or animal waste to biogas or electricity within WPS’s service territory. These project dollars will act as seed funding for the entire project, which may include the construction of community manure treatment facilities designed to receive manure from nearby dairy farms. Such a project will promote solutions to the continuing water quality issues posed by phosphorus and nutrient-containing runoff and generate a biogas that would be used to generate renewable electricity for offsite or facility use.

The Renewable Energy Resource Enhancement Project requires WPS to propose a plan to spend up $4 million to fund projects designed to increase the power production potential of existing wind farms and/or hydroelectric facilities in Wisconsin. Such projects shall be in addition to any other legal obligations, including WPS’s obligations under any state Renewable Portfolio Standard. With regard to the wind farm project, prior to implementation of the project, WPS shall complete a study of equipment, historic production, and wind conditions to customize optimizations and maximize production from individual turbines and from the wind site as a whole. The potential improvements might include a control system upgrade, blade tip extensions, winter icing prevention, turbine pitch optimization, and turbine control software. With regard to the hydroelectric facility project, WPS shall propose a plan designed to increase the existing hydroelectric facility water utilization and energy output. The intent of the project would be to gain electrical energy production from the renewable resource without changing the river flow characteristics. Project activities include improving the water wheel design for increased energy output while maintaining the current river water flow and making control system enhancements to maintain water levels at lower flow rates while continuing electrical generation. The intent of the projects would be to increase the generation from the renewable resource wind and hydroelectric generation facilities. This would be in excess of WPS’s obligations under the state’s Renewable Portfolio Standard, producing additional MW generation from renewable wind and hydroelectric power, which is expected to offset coal generation.

The Wood Stove Change-Out Project requires WPS to propose a plan to spend between $500,000 to $2,000,000 to sponsor a wood-burning appliance change out and retrofit project in Brown, Marathon, and adjacent counties in Wisconsin. The air pollutant reductions must be obtained by replacing, retrofitting or upgrading inefficient, higher polluting wood-burning stoves and outdoor boilers as follows: (1) replacing older hydronic or outdoor wood boilers with EPA Phase II hydronic heaters, or retrofitting such older hydronic or outdoor wood boilers to meet EPA Phase II hydronic heater standards; (2) replacing pre-1988 wood stoves with EPA-certified wood stoves and/or cleaner burning, more energy-efficient hearth appliances (e.g., wood pellet, gas, or propane hearth appliances); and/or (3) replacing spent catalysts in EPA-certified wood stoves. To qualify for replacement, retrofitting or upgrading, the older boiler, pre-1988 wood stove, or EPA-certified wood stove must be the primary 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 Pulliam and Weston.

The Compressed Natural Gas (CNG) or Hybrid Fleet Project allows WPS elect to submit a plan to spend up to $2,000,000 to replace gasoline and diesel powered fleet vehicles located in WPS’s service territory (passenger cars, light trucks, and heavy duty service vehicles) with newly manufactured alternative fuels vehicles and/or CNG vehicles. Upgraded fleet vehicles must be owned by WPS or shall be publicly-owned motor vehicles. The replacement of gasoline and diesel vehicles with alternative fuels vehicles or CNG vehicles will reduce emissions of NOx, PM, VOCs, and other air pollutants.

The Solar PV Panels Project allows WPS to elect to submit a plan to spend up to $2,000,000 to install conventional flat panel or thin film solar photovoltaics, and/or solar thermal water to create a grid connected on public school buildings and buildings owned by not-for-profit organizations located in Brown, Marathon, and adjacent counties in Wisconsin. As part of this project, WPS must fund a project service contract for maintenance costs for 25 years. If implemented, the project will benefit the local community by reducing the demand for power in an area dominated by coal.

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Civil Penalty

WPS will pay a total of $1.2 million in civil penalties.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Eastern District of Wisconsin, 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 25th 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 total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.

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For more information, contact:

Sabrina Argentieri
Air Enforcement Division
U. S. Environmental Protection Agency
77 West Jackson Boulevard
Mail Code – C-141
Chicago, IL 60604-3507
(312) 353-5485

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