Federal court rules for Alabama Power in clean air case

Birmingham, Ala., March 16, 2011 A federal judge in Birmingham on Monday dismissed a long-running clean air lawsuit brought by the U.S. Environmental Protection Agency against Alabama Power. The case related to maintenance work conducted at the company's coal-fired power plants.

Alabama Power maintained from the start that its activities were always in full compliance with the federal Clean Air Act. The ruling by U.S. District Judge Virginia Hopkins rejected EPA's accusations and methods for determining whether power plant maintenance projects trigger an obligation to get a new clean air permit.

It also supports the position that electric utilities can do routine maintenance and repairs on their coal-fired generating units without running afoul of EPA's "New Source Review" regulations.

"Following the rules is a core principle at Alabama Power, and we're very pleased with the court's findings in the case," said Charles McCrary, Alabama Power president and CEO.

The case was originally filed in 1999 in Georgia, and refiled in 2001 in Alabama as part of a nationwide enforcement initiative targeting owners of coal-fired generating plants.

EPA argued that owners of coal-fired generating units needed to obtain new clean air act permits prior to performing routine maintenance work that is typically carried out at power plants to maintain reliability of the electric system.

EPA accused Alabama Power of violating the law by performing several maintenance projects in the 1980s and 1990s without first obtaining new permits.

All the units involved were properly permitted under the federal Clean Air Act and were operated in compliance with those permits. Alabama Power maintained that New Source Review permits are required only for construction projects that increase emissions.

EPA's lawsuit targeted eight maintenance projects conducted between 1985 and 1997 at four Alabama Power plants. Last summer, EPA dropped five of the claims. At the heart of the remaining claims was testimony of two experts that EPA hired to prove there was an increase in emissions from the projects. Under EPA's approach, nearly any work conducted at the plants to improve reliability would result in increased emissions.

Following a recent similar ruling in the U.S. Court of Appeals for the 7th Circuit, Judge Hopkins concluded that EPA's methodology was not valid. On Monday she dismissed the case, ruling in favor of Alabama Power on every remaining claim.

In the decade since EPA started this case, Alabama Power has invested nearly $2.6 billion in clean air technology at its coal-fired generating plants. These clean air projects were designed to meet other environmental requirements and have resulted in significant emissions reductions from the company's largest coal-fired power plants. At the same time, the company has increased generation to meet customer demand for electricity.

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