COLUMBUS — American Electric Power said Tuesday that it will pay $20 million to buy a tiny Ohio River hamlet, which last summer was plagued by blue clouds of sulfuric acid gas drifting from the company's nearby coal-burning plant.

        The 221 residents of Cheshire in southeastern Ohio will have to give up their land and homes.

        “Relocation will not be easy, especially for some whose families have lived in Cheshire for generations,” said Tom Reese, mayor of the hamlet 90 miles southeast of Columbus. “It will be sad indeed to see our village disappear.”

        Under the agreement, the Gallia County residents will give up their rights to sue the company over personal and property damage they claim they sustained from the emissions.

        “AEP's offer was one that residents found to be a very good resolution,” said Barry Neuman, the Washington, D.C., attorney who represents nearly all the village's residents. “They overwhelmingly approved of the settlement.”

        Exactly how much each resident will receive was not disclosed, but Mr. Neuman said residents agreed on a formula that will give them substantially more than they need to relocate.

        AEP installed a new, $175 million pollution control system at the plant in May 2001 to be used during the May-September ozone season in compliance with a federal mandate to cut nitrogen oxide emissions.

        However, chemicals from the system created a blue acid haze that fell on Cheshire more than a dozen times last summer.

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