Wednesday, March 10, 2004

Cinergy, Feds head for trial

No agreement on pollution controls seen

By Dan Klepal
The Cincinnati Enquirer

Cinergy Corp. has told its shareholders that an agreement with the federal government on the amount of pollution controls it needs to add to area power plants is "unlikely," and that the billion-dollar issue is probably headed for court.

The trial is scheduled for August 2005.

Cinergy made the statement in a quarterly filing to its shareholders. The energy giant has been in negotiations with the federal government since 2000, after the U.S. Department of Justice filed a lawsuit claiming that Cinergy had undertaken decades of major expansions without adding the newest pollution control technologies, as required under the Clean Air Act.

A tentative agreement between Cinergy and the federal government was reached in 2000, with Cinergy agreeing to spend $1.4 billion on pollution controls. But that settlement never was finalized, and the parties have been negotiating ever since.

Cinergy CEO Jim Rogers has said his company already has spent $900 million on new pollution controls.

The issue hits residents of Greater Cincinnati in their lungs and their wallets.

Whatever the cost of adding pollution controls, estimated by the federal government to be at least $1.4 billion, it will be paid by Cinergy customers. Emissions from coal-fired power plants can lead to respiratory illness and even premature death.

Steve Brash, a Cinergy spokesman, said the main sticking point is a demand for an additional $400 million in pollution-control devices that just surfaced in negotiations last summer. He said Cinergy is still willing to negotiate, but that the additional demands are too costly.

The Ohio and Hoosier environmental councils, have joined with the federal government as plaintiffs in the case. Kurt Walzer, spokesman for the Ohio Environmental Council, said there is good reason for the government to up its pollution-control demands.

"We (initially) agreed to less because it would have meant clean air faster for the Ohio River Valley," Walzer said. "But four years later, the benefit of settling early over going to trial is getting pretty thin. It's pretty clear to us now that the Clean Air Act needs to be enforced in this case."


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