By Sara Thorson
The Associated Press

COLUMBUS - FirstEnergy Corp. has agreed to spend $1.1 billion to drastically cut pollution from a coal-burning power plant, delaying the opening of the penalty phase of a lawsuit by federal agencies and three states, a source involved in the case said.

Environmentalists said the agreement likely will be scrutinized by other utilities companies being sued over pollution abatement, including Cinergy Corp. of Cincinnati and Southern Indiana Gas & Electric.

It is the first trial over government accusations that utilities have rebuilt power plants without installing smog controls required under the Clean Air Act.

The agreement between the utility and the plaintiffs, involving a power plant on the Ohio River near Steubenville, was reached last week, said the source, who declined to be identified because the judge instructed people involved in the case not to talk about it.

Under the agreement reported Thursday by the Columbus Dispatch, FirstEnergy will reduce emissions by at least 90 percent by 2010 for acid rain-causing sulfur dioxide and nitrous oxide, a component of smog, the source said.

The pollutants have been linked to asthma, heart disease or other health problems.

The sides also agreed on the amount of penalties FirstEnergy must pay for violating the Clean Air Act, the source said, but would not discuss the specific amount. FirstEnergy also agreed to invest in pollution-free energy production.

The lawsuit against the Akron-based FirstEnergy's W.H. Sammis Plant was the first put on trial out of a group of lawsuits targeting 51 power plants that was filed by the Environmental Protection Agency and Justice Department. Connecticut, New Jersey and New York joined the lawsuits, saying they suffered directly from pollution produced by the plants.

The Justice Department said FirstEnergy was required to install the best available pollution-control technology when work was done between 1984 and 1998 on the Sammis plant. Prosecutors argued the additional controls were necessary because major improvements extended the plant's life and allowed it to generate more electricity.

FirstEnergy maintained that the work was routine maintenance that did not require additional smog controls and did not increase generating capacity or emissions.

U.S. District Judge Edmund A. Sargus Jr. in Columbus ruled last August after a three-week trial that FirstEnergy had violated the law and would have to clean up the plant's emissions.