Cinergy Settles With EPA Over Coal-Fired Plants

Break out the lipstick. Cinergy (CIN) and the Environmental Protection Agency have kissed and made up. But it's not going to be that easy.

The EPA and other agencies, including the Department of Justices and several state governments, have agreed to drop their lawsuits against Cinergy, if the company would be willing to clean up some of its operations, which have come under fire for possible violations of the Clean Air Act.

Under the agreement, the Cincinnati-based utility company will shut down nine small, coal-fired boilers and either convert them to natural gas or leave them shuttered. The company will also build additional sulfur dioxide scrubbers by 2008, upgrade pollution control systems and begin installing devices to control nitrogen oxide levels.

The company said the scrubbers will set it back $500 million, in addition to the $700 million it plans to spend on the nitrogen oxide controls.

Cinergy admits no wrongdoing, but must invest $21.5 million in environmentally beneficial projects over the next five years and pay a penalty of $8.5 million to the U.S. government.

>To order reprints of this article, click here: Reprints